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Problem 1: Which of the following is true regarding the contribution margin ratio of a single product company?
Option 1: As fixed expenses decrease, the contribution margin ratio increases.
Option 2: The contribution margin ratio equals the selling price per unit less the variable expense ratio.
Option 3: The contribution margin ratio multiplied by the selling price per unit equals the contribution margin per unit.
Option 4: The contribution margin ratio will decline as unit sales decline.
Explain the budgeting process and its importance to a business, identifying the components of different budgets, forecast estimates for inclusion in the budgets.
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Prepare a master budget for the three-month period.
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This individual assignment is based on the TerraCycle Inc.
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A new plant accountant suggested that the company may be able to assign support costs to products more accurately by using an activity based costing system that relies on a separate rate for each manufacturing activity that causes support costs.
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