Comparing contribution margin [CM] to gross margin [GM], which of the following is TRUE?
A) If Cost of goods sold includes fixed costs, then CM will exceed GM.
B) If Cost of goods sold does not include any fixed costs, then CM will equal GM.
C) In the merchandising sector, CM and GM are equivalent terms.
D) If CM and GM remain constant from one period to the next, operating income has to remain constant as well.
E) CM is computed after all variable costs are deducted, but GM is computed by deducting only cost of goods sold from revenues.

Question

Quizplus · Accepted Answer

CM is computed after all variable costs are deducted, but GM is computed by deducting only cost of goods sold from revenues.

Comparing Contribution Margin [CM] to Gross Margin [GM], Which of the Following