Which of the Following Formulas Would Be Best for Calculating $\frac{\text { unit price - variable cost per unit }}{\text { unit price }}$

question 2

Multiple Choice

Which of the following formulas would be best for calculating the total contribution margin?

• A) sales revenue - total variable cost
• B) \(\frac{\text { unit price - variable cost per unit }}{\text { unit price }}\)
• C) price per unit - total cost per unit
• D) \(\frac{\text { revenueper product }}{\text {overall revenue }}\)

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Definitions:

Sales Revenues Section

This section of an income statement accounts for the total income generated by the sale of goods or services before any costs or expenses are deducted.

Sales Discounts

Reductions to the selling price of goods or services that encourage customers to pay promptly.

Sales Returns and Allowances

Deductions from a company's sales revenue for returned merchandise or allowances given for damaged goods.

Credit Terms

Conditions under which credit is extended by a seller to a buyer, detailing the time period for payment and any discounts for early payment.