Which Inventory Costing Method Calculates Contribution Margin Instead of Gross

question 59

Multiple Choice

Which inventory costing method calculates contribution margin instead of gross margin?

• A) Full costing
• B) Gross margin costing
• C) Variable costing
• D) Absorption costing

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Definitions:

Market Value

The current quoted price at which an asset or a service can be bought or sold in a marketplace.

Retained Earnings

The portion of net income that is not distributed to shareholders and is instead reinvested in the company.

Treasury Stock

Shares of a company's own stock that it has reacquired and held in the company's treasury.

Cost Per Share

The price at which a company's shares were initially offered to the public or the current market value of a share.