Which of the following statements about the contribution-margin approach is FALSE?
A) It is concerned with the amount contributed by an item or group of items toward covering fixed costs.
B) This approach suggests that it is not necessary to consider all costs in all situations.
C) Top management almost always finds this approach more useful than full-cost analysis.
D) This approach frequently leads to data which suggest a different decision than might be indicated by the full-cost approach.
E) It focuses on controllable costs-rather than on total costs.

Question

Quizplus · Accepted Answer

This statement is false. While the contribution-margin approach may be useful in some situations, top management may not always find it more useful than full-cost analysis. It ultimately depends on the specific circumstances and information needed for decision-making.

Which of the Following Statements About the Contribution-Margin Approach Is