The text suggests that comparing the unit contribution margin of a sports car with an entry level vehicle is like comparing apples and oranges, but that comparing the contribution margin ratios is a fair comparison Do you agree Why Can you think of an example where it may be more appropriate to com...

Yes In general the unit of one product is not necessarily comparable t ...

The text suggests that comparing the unit contribution margin of a sports car with an entry-level vehicle

Question:

The text suggests that comparing the unit of a sports car with an entry-level vehicle is like comparing apples and oranges, but that comparing the ratios is a fair comparison. Do you agree? Why? Can you think of an example where it may be more appropriate to compare unit s but not ratios?

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...