Contribution margin equals ________.

Question

Quizplus · Accepted Answer

Contribution margin represents the amount of revenue available to cover fixed costs and contribute to profit. It is calculated as revenue minus variable costs, which are costs that vary directly with the level of production or sales. Therefore, option C is the correct answer. Option A is incorrect because period costs include both fixed and variable costs, and not all period costs are relevant to contribution margin. Option B is incorrect because product costs include both fixed and variable costs, and not all product costs are relevant to contribution margin. Option D is incorrect because fixed costs are not included in the calculation of contribution margin.

Contribution Margin Equals ________