Companies prepare contribution margin reports by market segments and product segments because products contribute to profitability in various ways.

Question

Quizplus · Accepted Answer

Companies prepare contribution margin reports by market segments and product segments because different products may have different levels of sales, costs, and contribution margins, which affects how profitable they are. By analyzing contribution margins by market segment and product segment, companies can make informed decisions about pricing, product mix, and resource allocation.

Companies Prepare Contribution Margin Reports by Market Segments and Product