In all respects, company a and company b are identical except that company a’s costs are mostly variable, whereas company b’s costs are mostly fixed.
PPT slide. 10 slides total address these questions , not including a title and a reference slide.
1. What is meant by a product’s contribution margin ratio? How is this ratio useful in planning business operations?
2. Often the most direct route to a business decision is an incremental analysis. What is meant by an incremental analysis?
3. In all respects, Company A and Company B are identical except that Company A’s costs are mostly variable, whereas Company B’s costs are mostly fixed. When sales increase, which company will tend to realize the greatest increase in profits? Explain.
4. What is meant by the term operating leverage?
5. What is meant by the term break-even point?