(Appendix 5A)Which of the following best describes a cost object,such as a product or customer,that has a positive red margin?
A) Its green margin will be positive.
B) Its green margin may be positive,negative,or zero.
C) Its green margin will be negative.
D) Its green margin will be zero.

Question

Quizplus · Accepted Answer

A positive red margin indicates that the cost object (product or customer) is generating a profit. As a result, its green margin (revenue minus variable costs) will also be positive, as revenue exceeds the variable costs associated with producing the product or serving the customer.

(Appendix 5A)Which of the Following Best Describes a Cost Object,such