A net loss would occur if the contribution margin is less than indirect expenses.

Name: A net loss would occur if the contribution margin is less than indirect expenses.
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Question

Quizplus · Accepted Answer

A net loss occurs when total expenses, including indirect expenses, exceed total revenues. If the contribution margin (revenue minus variable costs) is less than indirect expenses, it means the business is not covering its total costs, leading to a net loss.

A Net Loss Would Occur If the Contribution Margin Is