The Difference Between Sales Price Per Unit and Variable Cost

question 99

Multiple Choice

The difference between sales price per unit and variable cost per unit is the:

• A) Contribution margin per unit (cm).
• B) Total contribution margin (CM).
• C) Contribution margin ratio.
• D) Margin of safety (MOS).
• E) Breakeven point.

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Definitions:

Materials

The physical components or substances used in the production of goods.

Labor

The effort by human workers in producing goods or providing services, often considered in terms of workforce or employment.

Period Costs

Costs that are expensed in the period they're incurred, not directly tied to production activity, such as selling and administrative expenses.

Direct Materials

Raw materials that can be directly attributed to the production of specific goods or services in manufacturing.