The Contribution Margin Is Equal to

question 23

Multiple Choice

The contribution margin is equal to

• A)sales minus cost of goods sold.
• B)sales minus operating expenses.
• C)sales minus fixed expenses.
• D)sales minus variable expenses.

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Definitions:

Break-Even Point

The point at which total revenues equal total costs, and the business makes neither profit nor loss.

Fixed Expenses

A repackaged definition of fixed costs emphasizing their nature as constant across different levels of output or sales.

Selling Price

The amount of money charged to the buyer for a product or service.

Net Income

The total profit of a company after all expenses and taxes have been deducted from revenue, indicating the company's bottom line.