Assume that Department A has a higher contribution margin ratio but a lower responsibility mar gin ratio

Question:

Assume that Department A has a higher ratio but a lower responsibility mar gin ratio than Department B. If $10,000 in advertising is expected to increase the sales of either department by $50,000, in which department would the advertising dollars be spent to the best advantage?

Contribution Margin
Contribution margin is an important element of cost volume profit analysis that managers carry out to assess the maximum number of units that are required to be at the breakeven point. Contribution margin is the profit before fixed cost and taxes...