If a retailer sells a product whose contribution margin equals the gross margin percentage, the gross margin percentage will be unaffected by the transaction.

Question

Quizplus · Accepted Answer

If the contribution margin equals the gross margin percentage, it means that all variable costs (those included in the contribution margin calculation) are covered by the gross margin (revenue minus cost of goods sold). Therefore, any sales made at the same price will have the same gross margin percentage, and the contribution margin will remain unchanged.

If a Retailer Sells a Product Whose Contribution Margin Equals