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What is contribution margin ratio and when is it most useful

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What is contribution margin ratio and when is it most useful? How is the breakeven equation modified to take into account the sales required to earn a target profit?

Suppose two companies are the same except that company A has more variable costs than fixed costs. Company B has more fixed costs than variable costs. When sales increase, which company will realize the greatest increase in profits?

Reference no: EM13491665

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