The difference between the unit selling price and the unit variable costs and expenses is known as the
A) average price.
B) elasticity.
C) contribution margin.
D) break-even point.

Question

Quizplus · Accepted Answer

The difference between the unit selling price and the unit variable costs and expenses is known as the contribution margin. It represents the amount available to cover fixed costs and to generate profit. Therefore, option C is the correct answer. Option A (average price) is not a measure commonly used in cost-volume-profit analysis. Option B (elasticity) refers to the degree of responsiveness of demand or supply to changes in price or other factors, which is not directly related to the question. Option D (break-even point) refers to the level of revenue or sales volume at which total costs are equal to total revenue, which is related to but not the same as the contribution margin.

The Difference Between the Unit Selling Price and the Unit