Total contribution margin is defined as:
A)selling price times units sold.
B)cost to produce times units sold.
C)total sales revenues less total variable costs.
D)total variable costs less fixed costs.

Question

Quizplus · Accepted Answer

Total contribution margin is the difference between total sales revenues and total variable costs. It represents the amount of money available to cover fixed costs and contribute to profits or losses. Option A is incorrect because selling price times units sold is simply total sales revenue. Option B is incorrect because cost to produce times units sold is total variable costs, not total contribution margin. Option D is incorrect because total variable costs less fixed costs is operating income, not total contribution margin.

Total Contribution Margin Is Defined As