An analysis of the total contribution margin is often useful, especially when a company's products are substitutes for one another.

Question

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Analyzing the total contribution margin can help a company determine which product(s) are generating the most profit and where they should focus their resources. This is particularly important when dealing with substitute products, as it allows the company to make informed decisions about which products to emphasize or phase out.

An Analysis of the Total Contribution Margin Is Often Useful