In certain situations, gross margin can equal contribution margin.

Name: In certain situations, gross margin can equal contribution margin.
Brand: Quizplus
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Question

Quizplus · Accepted Answer

Gross margin is calculated by subtracting the cost of goods sold from revenue, while contribution margin is calculated by subtracting variable costs from revenue. In some situations where there are no fixed costs, the two margins may be equal. However, in most cases, gross margin will include fixed costs and therefore will not equal contribution margin.

In Certain Situations, Gross Margin Can Equal Contribution Margin