Contribution margin
A) is not the same as marginal income.
B) can be calculated as a ratio or per unit.
C) equals the sales price minus all the fixed expenses.
D) equals total fixed costs minus total variable costs.

Question

Quizplus · Accepted Answer

Contribution margin can be calculated as a ratio (contribution margin ratio) or per unit (contribution margin per unit). It equals the sales price minus variable expenses (not fixed expenses). The difference between total fixed costs and total variable costs is known as the contribution margin income statement format, but it is not the definition of contribution margin.

Contribution Margin