Contribution margin is calculated as _______ less _______.
A) sales revenue; variable costs
B) fixed costs; variable costs
C) sales revenue; fixed costs
D) break-even point; variable costs

Question

Quizplus · Accepted Answer

Contribution margin is calculated as sales revenue minus variable costs. This represents the amount of money that is available to cover fixed costs and contribute to profit. Option B is incorrect because fixed costs are not subtracted to calculate contribution margin. Option C is incorrect because fixed costs are not subtracted from sales revenue to calculate contribution margin. Option D is incorrect because the break-even point is not subtracted to calculate contribution margin.

Contribution Margin Is Calculated as _______ Less _______

Contribution Margin Is Calculated as _ Less _