Supporters of the contribution margin approach believe that:

Question

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Supporters of the contribution margin approach argue that only direct costs and revenues should be considered when evaluating departmental performance. This is because indirect expenses are not directly attributable to a specific department's operations and can distort the assessment of its profitability or efficiency. Therefore, they believe indirect expenses should not be used for evaluating departmental performance.

Supporters of the Contribution Margin Approach Believe That