Contribution Analysis

• Lesson
• Exercise
• Answer

The answers are below:

(1) Boreland should employ which of the following accounting principles?

• (a) Restitution Calibration
• (b) Transactional Analysis
• (c) Constitutional Analysis
• (d) Contribution Analysis  

(4) True or False, generally speaking Contribution Analysis identifies overhead costs by accounting for all known fixed, direct and variable costs and then subtracting that amount from revenues.

• (1) D, Contribution Analysis.
• (2) D, All of the above.
• (3) D, All of the above.
• (4) True, although other variations may be employed.

(2) To calculate a products contribution to profits, Boreland will need to assemble which of the following data?

• (a) Number of units sold
• (b) Contribution margin per unit
• (c) Price records
• (d) Variable costs per unit
• (e) All of the above

(3) Which of the following are potential benefits Boreland might realize as a result of      employing a Contribution Analysis?

• (a) Identifying previously unkown costs
• (b) Assisting in categorizing costs
• (c) Guidance in setting a prices for totally new projects
• (d) All of the above