Contribution analysis:
A)Helps in obtaining an accurate picture of a product's value by allocating all costs to it.
B)Involves fixed joint costs that cannot be linked directly to a single unit of analysis.
C)Is helpful in determining the yield derived from the application of additional resources.
D)Uses both direct and indirect costs to the unit of analysis.

Question

Quizplus · Accepted Answer

Contribution analysis focuses on understanding the incremental benefits or yield derived from the application of additional resources, particularly in contexts where direct financial outcomes are assessed, such as in evaluating the profitability of products or services by considering their contribution margin. This approach does not necessarily allocate all costs (especially fixed costs) directly to products, nor does it focus on the allocation of fixed joint costs or the use of both direct and indirect costs in the same way cost accounting might.

Contribution Analysis