The Difference Between Sales Price Per Unit and Variable Cost

question 146

Multiple Choice

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

• A) Gross profit from sales.
• B) Gross margin per unit.
• C) Fixed cost per unit.
• D) Margin of safety per unit.
• E) Contribution margin per unit.

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Definitions:

Revenues

Income that a company receives from its normal business activities, usually from the sale of goods and services to customers.

Gains

Result primarily from the disposal of assets for more than their cost minus the amount of cost depreciated in the past.

Net Assets

The total assets of an organization minus its total liabilities, indicating the net worth or equity of the company.

Net Sales

Net sales are the amount of revenue generated from sales activities after deducting returns, allowances for damaged or missing goods, and any discounts allowed.