The Contribution Margin Is Equal to Sales Revenue Less Fixed

question 40

True/False

The contribution margin is equal to sales revenue less fixed costs.

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Definitions:

Fixed Cost

Costs that do not vary with the level of production or sales, remaining constant within a specific range of activity.

Contribution Margin

The difference between a company's sales revenue and its variable costs.

Traceable Fixed Expenses

Fixed costs that can be directly linked to a specific business segment or operation.

Net Operating Income

A company's income after all operating expenses are deducted but before interest and taxes are accounted for.