Throughput contribution is computed as
A) Sales - variable costs
B) Sales - cost of direct materials purchased
C) Number of units sold × (price per unit - material cost per unit)
D) Sales - period costs

Question

Quizplus · Accepted Answer

Throughput contribution is the amount of revenue generated by a company's operations that is left after deducting only the direct material costs associated with producing the goods or services sold. Therefore, choice C is the best answer as it takes into account the number of units sold, price per unit, and material cost per unit. Choices A, B, and D do not accurately reflect this calculation.

Throughput Contribution Is Computed as