What is the equation to calculate contribution margin?
A)contribution margin = sales revenue × variable cost ratio
B)contribution margin ratio = contribution margin/variable costs
C)contribution margin = fixed costs
D)contribution margin ratio = 1 − variable cost ratio

Question

Quizplus · Accepted Answer

The contribution margin ratio is calculated as 1 minus the variable cost ratio, which represents the proportion of sales revenue that exceeds variable costs and contributes to covering fixed costs and generating profit.

What Is the Equation to Calculate Contribution Margin