Which of the Following Equations Is Correct

question 25

Multiple Choice

Which of the following equations is correct?

• A) Contribution = sales - variable costs
• B) Contribution = sales + variable costs
• C) Contribution = fixed costs - profit
• D) Contribution = sales - profit

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Definitions:

Flexibility

The ability of a company or system to adapt to changes or new requirements.

Accounting Information

Financial data and records about an organization's transactions, used for reporting, analysis, and decision-making purposes.

Consistency

In accounting, the principle that requires the same accounting methods to be used from period to period for comparability.

Accounting Principles

The rules and guidelines that companies must follow when reporting financial data.