Construction Accounting And Financial Management (4th Edition)
4th Edition
ISBN: 9780135232873
Author: Steven J. Peterson MBA PE
Publisher: PEARSON
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Textbook Question
Chapter 10, Problem 1DQ
What are some of the ways a company can increase its contribution margin?
Expert Solution & Answer
To determine
Identify the means to increase the contribution margin of a company.
Explanation of Solution
A company through the following ways can increase its contribution margin:
- By increasing the revenues
- By reducing the costs involved in construction through control procedures
- By reducing the variable overhead
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Explain the concept of a contribution margin and describe how it differs from gross margin. Also, what is the significance of the contribution margin ratio, and how is the ratio useful in planning business operations? Provide examples.
Chapter 10 Solutions
Construction Accounting And Financial Management (4th Edition)
Ch. 10 - What are some of the ways a company can increase...Ch. 10 - Prob. 2DQCh. 10 - Prob. 3DQCh. 10 - Prob. 4DQCh. 10 - A construction company has total revenues of...Ch. 10 - A construction company has total revenues of...Ch. 10 - A construction company has total revenues of...Ch. 10 - A construction company has total revenues of...Ch. 10 - Determine the break-even volume of work for a...Ch. 10 - Determine the break-even volume of work for a...
Ch. 10 - Determine the break-even volume of work for a...Ch. 10 - Determine the break-even volume of work for a...Ch. 10 - A construction company has a fixed overhead of...Ch. 10 - A construction company has a fixed overhead of...Ch. 10 - Determine the break-even contribution margin ratio...Ch. 10 - Determine the break-even contribution margin ratio...Ch. 10 - Determine the break-even contribution margin ratio...Ch. 10 - Determine the break-even contribution margin ratio...Ch. 10 - Determine the profit and overhead markup for a...Ch. 10 - Determine the profit and overhead markup for a...Ch. 10 - Prob. 21PCh. 10 - Prob. 22P
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- How is contribution margin calculated? What about contribution margin ratio? Aren’t they the same thing? Why do we need both?arrow_forwardContribution margin ratio definition and how is useful in planning business operations?arrow_forwardWhich of the following is the indicator of the rate at which company is earning profit? Select one: a. Margin of safety b. All options are correct c. Contribution margin d. Profit volume ratioarrow_forward
- How change in activity(sale) affect the contribution margin and net operating income?arrow_forwardIs there a point in a cost-volume-profit analysis when the company is expected to profit?arrow_forwardWhat is meant by a product’s contribution margin ratio? How is this ratio useful in planning business operations? Often the most direct route to a business decision is an incremental analysis. What is meant by an incremental analysis?arrow_forward
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