The correct answer is: sales - variable costs.

Here's why:

Contribution margin is a cost accounting concept that allows a company to determine the profitability for individual items that they sell. It is calculated as the selling price per unit minus the variable cost per unit.

In other words, it's the amount that each unit contributes towards covering fixed costs and then generating profit.

So, the contribution margin is not about subtracting all expenses, fixed costs, or the cost of goods sold from sales. It's specifically about subtracting the variable costs from sales.

Question

The correct answer is: sales - variable costs.

Here's why:

Contribution margin is a cost accounting concept that allows a company to determine the profitability for individual items that they sell. It is calculated as the selling price per unit minus the variable cost per unit.

In other words, it's the amount that each unit contributes towards covering fixed costs and then generating profit.

So, the contribution margin is not about subtracting all expenses, fixed costs, or the cost of goods sold from sales. It's specifically about subtracting the variable costs from sales.

Knowee AI · Accepted Answer

The correct answer is: sales - variable costs.

Here's why:

Contribution margin is a cost accounting concept that allows a company to determine the profitability for individual items that they sell. It is calculated as the selling price per unit minus the variable cost per unit.

In other words, it's the amount that each unit contributes towards covering fixed costs and then generating profit.

So, the contribution margin is not about subtracting all expenses, fixed costs, or the cost of goods sold from sales. It's specifically about subtracting the variable costs from sales.

Multiple Choice QuestionContribution margin is the excess ofMultiple choice question.sales - all expenses.sales - fixed costs.sales - cost of goods sold.sales - variable costs.

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