Asked by Rachel Hwang on May 02, 2024
Verified
Sales less total variable costs equals manufacturing margin.
Manufacturing Margin
The difference between the sales revenue of manufactured goods and the direct costs associated with producing those goods.
Total Variable Costs
All costs that vary with the level of production or sales, including materials, labor, and overhead expenses.
- Master the concept of contribution margin and its importance in assessing the effectiveness of business operations.
Verified Answer
MF
Makaela FranklinMay 06, 2024
Final Answer :
False
Explanation :
Sales less total variable costs equals contribution margin, not manufacturing margin. Manufacturing margin specifically refers to sales minus the costs of goods sold (COGS), which includes direct labor, direct materials, and manufacturing overhead, but not all variable costs.
Learning Objectives
- Master the concept of contribution margin and its importance in assessing the effectiveness of business operations.
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