Contribution Margin is defined as:
A)Selling price less variable cost
B)Selling price less operating expenses
C)Sales less fixed cost
D)Sales less variable cost and mixed cost

Question

Quizplus · Accepted Answer

Contribution margin is the amount of money left over after subtracting the variable costs from the selling price. Therefore, choice A, selling price less variable cost, represents the definition of contribution margin. The other choices either involve fixed costs or operating expenses, which are not included in the calculation of contribution margin.

Contribution Margin Is Defined As