In the manufacturing sector, ________.
A) only variable costs are subtracted to determine gross margin
B) fixed overhead costs are subtracted to determine gross margin
C) fixed overhead costs are subtracted to determine contribution margin
D) all operating costs are subtracted to determine contribution margin

Question

Quizplus · Accepted Answer

In the manufacturing sector, fixed overhead costs are subtracted along with variable costs to determine the gross margin. Gross margin is calculated by subtracting the cost of goods sold (which includes both variable and fixed manufacturing costs) from sales revenue.

In the Manufacturing Sector, ________