In deciding how the store will benefit most from increasing the sales of selected departments,the store manager should be most interested in the:
A)Total sales of each department.
B)Contribution margin ratios of each department.
C)Fixed costs traceable to each department.
D)Responsibility margins of each department.

Question

Quizplus · Accepted Answer

The contribution margin ratio, which is the difference between a department's sales revenue and variable costs divided by sales revenue, is a measure of how much each department contributes to covering the store's fixed costs and generating profit. By understanding the contribution margin ratio of each department, the store manager can make informed decisions about which departments to focus on increasing sales in order to maximize overall profitability.

In Deciding How the Store Will Benefit Most from Increasing