The excess of a product's selling price over its variable costs is referred to as:
A) gross profit
B) gross margin
C) contribution margin
D) manufacturing margin

Question

Quizplus · Accepted Answer

The excess of a product's selling price over its variable costs is referred to as contribution margin. Option A, gross profit, is the difference between a product's revenue and total cost, including both variable and fixed costs. Option B, gross margin, is the percentage of a product's revenue that exceeds its cost of goods sold. Option D, manufacturing margin, is not a commonly used term in accounting or finance.

The Excess of a Product's Selling Price Over Its Variable