The Difference Between Unit Selling Price and Unit Variable Cost

question 202

Multiple Choice

The difference between unit selling price and unit variable cost expressed on a unit basis is referred to as

• A) fixed cost.
• B) break-even point.
• C) contribution margin.
• D) unit cost.
• E) total variable cost.

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Definitions:

After-Tax Discount Rate

The after-tax discount rate is the rate used to discount future cash flows back to their present value, accounting for taxes, and is crucial in evaluating the after-tax net present value of future cash flows.

Capital Budgeting

The evaluation of investment projects in terms of their potential to increase shareholder value through strategic long-term asset allocation.

Incremental Sales

Incremental sales refer to the additional sales revenue gained from a particular sales activity or decision, beyond what would have been achieved otherwise.

Operating Expenses

Costs associated with the day-to-day operations of a business that are not directly tied to the production of goods or services.