The contribution margin is
A) the difference between sales and variable costs.
B) the difference between target income and operating income.
C) the difference between operating income and margin of safety.
D) equal to sales.
E) when total sales equals total costs.

Question

Quizplus · Accepted Answer

Contribution margin is calculated as the difference between sales revenue and total variable costs. It represents the amount available to cover fixed costs and contribute towards profits.

The Contribution Margin Is