The first sentence of an introduction is called a hook
Answer:
If a company is operating beyond its break-even point, sale of one more unit of products increases the company's profit by the amount of the unit contribution margin.
The correct answer is A
Explanation:
If a company operates beyond the break-even point, any sale of an additional unit increases the company's profit by the amount of the unit contribution margin. This is due to the fact that the fixed cost remains constant and any increase in sale increases contribution and profit by the same amount.
Answer:
Arbitrary allocation.
Explanation:
Arbitrary allocation is a method where costs budgeted are not based on any precise measurement,hence accurate costs could not be arrived at.
This approach to budgeting breeds inefficiencies as the accurate budgeting is expected to lead to accurate costing of products as well as pricing.
All in all,the true profitability of a business cannot be ascertained.
Finally,the organization adopting this type of approach needs to change to other accurate methods of budgeting such incremental or rolling budgeting.
