Under variable costing,subtract variable costs from sales to arrive at
A)gross profit.
B)gross margin.
C)contribution margin.
D)net income.

Question

Quizplus · Accepted Answer

Under variable costing, the contribution margin is calculated by subtracting the variable costs from the sales revenue. Gross profit and gross margin are calculated by subtracting all costs, including fixed costs, from sales revenue. Net income is calculated by subtracting all costs, both fixed and variable, from sales revenue. Therefore, the correct answer is C as it specifically refers to the difference between variable costs and sales revenue.

Under Variable Costing,subtract Variable Costs from Sales to Arrive at