Controllable Margin Is Defined as

question 67

Multiple Choice

Controllable margin is defined as

• A) sales minus variable costs.
• B) sales minus contribution margin.
• C) contribution margin less controllable fixed costs.
• D) contribution margin less noncontrollable fixed costs.

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Definitions:

Economic Profit

Economic profit is the difference between a firm's total revenue and its total costs, including both explicit and implicit costs, representing the excess over the firm's opportunity costs.

Implicit Costs

The firm’s opportunity costs of using resources owned or provided by the owner.

Explicit Costs

Dollar costs incurred by business firms, such as wages, rent, and interest.

Implicit Costs

The opportunity costs that are not directly incurred but represent the loss of alternative benefits when choosing one option over another.