The equation to find contribution margin under absorption costing is:
A) Sales - Variable Costs
B) Sales - Fixed Costs
C) Sales - Variable Costs - Fixed Costs
D) Gross Profit + Fixed Costs
E) Absorption costing does not calculate Contribution Margin

Question

Quizplus · Accepted Answer

Absorption costing includes both fixed and variable manufacturing costs in the cost of goods sold and does not separately calculate a contribution margin. Contribution margin is typically calculated under variable or direct costing methods.

The Equation to Find Contribution Margin Under Absorption Costing Is