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Unformatted text preview: the variable cost. The average contribution margin will be slightly different with the separate contribution margins of each product because of the rounding off factor. 5. This type of analysis is vital for testing if the result remains the same when certain variables are altered. Certain assumptions are made on Bill French’s first computations. In reality, the company’s decisions changes and this change brings about different result. Therefore, performing sensitivity analysis on important variables is very vital in company’s decision making processes....
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- Spring '11
- Contribution Margin, average contribution margin