The trend for cost of goods sold is it is decreasing as a percentage of sales and the trend for total marketing costs as a percentage of sales is increasing. What does this suggest to the company CEO? The CEO would want to analyze the company’s cost structure – particularly the contribution margin ratio, the relevant ranges for fixed expenses and the company’s marketing and production expenses The CEO would want to analyze whether operations has done something that reduces production costs, but that has also made the product less attractive in the customers’ eyes The CEO would want to analyze the company's margin % and asset utilization The CEO would want to analyze the company's cost of capital
The trend for cost of goods sold is it is decreasing as a percentage of sales and the trend for total marketing costs as a percentage of sales is increasing. What does this suggest to the company CEO? The CEO would want to analyze the company’s cost structure – particularly the contribution margin ratio, the relevant ranges for fixed expenses and the company’s marketing and production expenses The CEO would want to analyze whether operations has done something that reduces production costs, but that has also made the product less attractive in the customers’ eyes The CEO would want to analyze the company's margin % and asset utilization The CEO would want to analyze the company's cost of capital
Chapter6: Activity-based, Variable, And Absorption Costing
Section: Chapter Questions
Problem 5TP: In designing a bonus structure to reward your production managers, one of the options is to reward...
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The trend for cost of goods sold is it is decreasing as a percentage of sales and the trend for total marketing costs as a percentage of sales is increasing. What does this suggest to the company CEO?
The CEO would want to analyze the company’s cost structure – particularly the contribution margin ratio, the relevant ranges for fixed expenses and the company’s marketing and production expenses
The CEO would want to analyze whether operations has done something that reduces production costs, but that has also made the product less attractive in the customers’ eyes
The CEO would want to analyze the company's margin % and asset utilization
The CEO would want to analyze the company's cost of capital
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