(Price - variable costs) is also called .
A) profit
B) contribution per unit to fixed costs
C) maximum sales volume
D) fixed price units per contribution

Question

Quizplus · Accepted Answer

The calculation of (Price - variable costs) is known as the contribution margin per unit or contribution per unit to fixed costs. This calculation helps in determining how much each unit sold contributes to covering the fixed costs of a business. Therefore, option B is the correct answer. Option A is incorrect as profit refers to the amount remaining after deducting all costs (including fixed costs) from revenue. Option C is incorrect as maximum sales volume refers to the highest quantity of units that can be sold at a given price. Option D is not a term used in accounting or finance.

(Price - Variable Costs) Is Also Called