Contribution margin is the excess of revenues over:
A) cost of goods sold.
B) manufacturing cost.
C) all direct costs.
D) all variable costs.

Question

Quizplus · Accepted Answer

Contribution margin is calculated as the difference between revenues and all variable costs. This is because variable costs vary with changes in production or sales volume, whereas fixed costs remain constant regardless of the level of production or sales. Contribution margin is useful in calculating the break-even point and determining the profitability of different products or services.

Contribution Margin Is the Excess of Revenues Over