What Is Contribution Margin Equal to on a Contribution Margin

question 68

Multiple Choice

What is contribution margin equal to on a contribution margin income statement?

• A)Fixed expenses plus variable expenses
• B)Fixed expenses minus variable expenses
• C)Sales revenues minus variable expenses
• D)Sales revenues minus fixed expenses

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Definitions:

Statement of Stockholders' Equity

A financial statement showing the changes in the equity section of the balance sheet during a certain period, including shares issued, dividends paid, and earnings.

Income Statement

A financial document detailing a company's revenues, expenses, and net income over a specific period, illustrating its profitability.

Liabilities

Liabilities are the financial obligations of a company, including debts and other amounts owed to creditors, which must be settled over time.

Stockholders' Equity

Stockholders' equity represents the residual interest in the assets of a corporation after deducting liabilities, essentially what is owned by the company's shareholders.