In the contribution margin approach, any excess revenues over costs
A) Equals profits
B) Contributes to common costs and profits
C) Results in negative amortization
D) Offsets activity-based accounts
E) Reduces warehousing and production costs

Question

Quizplus · Accepted Answer

In the contribution margin approach, any excess revenues over variable costs contribute to covering fixed costs (common costs) and then to profits once fixed costs are covered.

In the Contribution Margin Approach, Any Excess Revenues Over Costs