Contribution Margin Is Calculated as _______ Less _______

question 21

Multiple Choice

Contribution margin is calculated as _______ less _______.

• A) sales revenue; variable costs
• B) fixed costs; variable costs
• C) sales revenue; fixed costs
• D) break-even point; variable costs

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Definitions:

Unit Variable Cost

The cost associated with producing one additional unit of a product, varying with the volume of production.

Wage Contract

An agreement between an employer and an employee that stipulates the terms of employment, including pay rate and job responsibilities.

Variable Costs Per Unit

Costs that vary with the level of production or sales volume, calculated on a per-unit basis.

Fixed Costs

Costs that do not vary with the volume of production or sales, such as rent, salaries, and insurance, remaining constant no matter the level of output.