A low-profit contribution percentage may be the result of selling low margin products or excessive selling expenses.

Question

Quizplus · Accepted Answer

A low-profit contribution percentage can be caused by selling products with low margins, which means that the cost of producing or acquiring the product is close to the selling price, leaving little profit. Another reason may be excessive selling expenses, such as high marketing or advertising costs, which reduce the amount of profit that can be generated from sales.

A Low-Profit Contribution Percentage May Be the Result of Selling