In the contribution margin approach, a ___________ margin is calculated while in a full-cost approach a ________ margin is calculated.
A) Gross; contribution
B) Singular; sequential
C) Contribution; gross
D) Minimal; Maximum
E) Below-cost; above cost

Question

Quizplus · Accepted Answer

In the contribution margin approach, the focus is on the contribution margin, which is calculated by subtracting variable costs from sales revenue. On the other hand, in the full-cost approach, fixed costs are also included in the calculation, resulting in a gross margin. Therefore, the correct answer is C, as it correctly identifies the type of margin calculated in each approach.

In the Contribution Margin Approach, a ___________ Margin Is Calculated