Which of the Following Statements About Contribution Margin and Gross

question 108

Multiple Choice

Which of the following statements about contribution margin and gross margin in CVP analysis is true?

• A) Contribution margin equals total revenue minus cost of goods sold.
• B) Contribution margin equals total revenue minus non-variable costs.
• C) Gross margin equals total revenue minus cost of goods sold.
• D) Service companies can compute a gross margin but not a contribution margin.
• E) Gross margin equals total revenue minus non-variable costs.

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Definitions:

Terrestrial Planets

Planets that are primarily composed of silicate rocks or metals, with a solid surface, similar to Earth.

Gas Giants

Large planets composed mostly of hydrogen and helium gases, with a small rocky core, notably including Jupiter and Saturn in our solar system.

Crater

A bowl-shaped depression formed by the impact of a meteorite or volcanic activity.

Meteoroid

A small particle from a comet or asteroid that is in the solar system and that could enter the Earth's atmosphere, becoming a meteor.