________ tells what portion of the total revenue remains, after covering variable costs, to contribute toward meeting fixed expenses and earning a profit.
A)The full absorption statement
B)The break-even selling price
C)The contribution percentage
D)Cost-plus pricing

Question

Quizplus · Accepted Answer

The contribution percentage is a measure of how much revenue is left over after variable costs are covered, and is used to determine how much is available to cover fixed expenses and contribute to profit. The full absorption statement is a financial statement that shows all costs, both variable and fixed, and the break-even selling price is the price at which total revenue equals total costs, but neither of these specifically addresses the portion of revenue available to cover fixed expenses and earn profit. Cost-plus pricing is a pricing strategy based on adding a markup to the cost of a product or service, but does not address the portion of revenue available to cover fixed expenses and earn profit.

________ Tells What Portion of the Total Revenue Remains, After