The contribution margin derived from different products is used to motivate the sales force to increase sales of the most profitable products.

Question

Quizplus · Accepted Answer

The contribution margin is the difference between the selling price of a product and its variable costs. By knowing the contribution margin of each product, a company can identify which products are the most profitable and encourage the sales force to sell more of those products. Therefore, the statement is true.

The Contribution Margin Derived from Different Products Is Used to Motivate