1 what is the variable cost ratio the contribution margin, Ask an Expert

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1. What is the variable cost ratio? The contribution margin ratio? How are the two ratios related?

2. Suppose a firm with a contribution margin ratio of 0.3 increased its advertising expenses by $10,000 and found that sales increased by $30,000. Was it a good decision to increase advertising expenses? Suppose that the contribution margin ratio is now 0.4. Would it be a good decision to increase advertising expenses?

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Financial Management, Finance

Category:- Financial Management
Reference No.:- M92096082

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