What does the contribution margin measure?
A)The amount that can be contributed to bond repayment
B)The incremental change in revenue from an additional unit sold
C)The amount available to pay fixed costs and contribute to profits
D)The incremental change in revenue from an additional dollar spent on advertising

Question

Quizplus · Accepted Answer

The contribution margin measures the amount of revenue available to cover fixed costs and contribute to profits. It is calculated by subtracting variable costs from revenues.

What Does the Contribution Margin Measure