Asked by Angie Harper on Jul 09, 2024
Verified
Reporting contribution margin by market segment is useful in assessing the profitability of each segment.
Market Segment
A subgroup of a larger market defined by its own unique preferences, characteristics, or needs.
Contribution Margin
The amount of revenue remaining after deducting variable costs, which contributes to covering fixed costs and generating profit.
- Gain insight into the principle of contribution margin and its relevance in analyzing business achievements.
Verified Answer
MH
Mohamad HalimehJul 12, 2024
Final Answer :
True
Explanation :
Reporting contribution margin by market segment helps in determining the profitability of each segment by calculating the revenue minus the variable costs associated with that segment. This information can be useful in making decisions about resource allocation and pricing strategies for each market segment.
Learning Objectives
- Gain insight into the principle of contribution margin and its relevance in analyzing business achievements.
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