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Does your answer to (b) mean that the other segments are more profitable businesses? he higher contribution margin ratio of a segment should not be
Does your answer to (b) mean that the other segments are more profitable businesses? he higher contribution margin ratio of a segment should not be interpreted as being the profitable segment. If the volume of business is not sufficient to exceed the break-even point, then the segments would be In the final analysis, the xed costs also should be considered in determining the overall profitability of the segments. The shows how sensitive the profit will be to changes in volume
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