Which of the Following Statements Best Defines the Contribution Margin

question 114

Multiple Choice

Which of the following statements best defines the contribution margin ratio?

• A)Total contribution margin divided by total sales.
• B)Unit contribution margin divided by unit sales price.
• C)Total contribution margin divided by total sales and unit contribution margin divided by unit sales price.
• D)None of the answers is correct.

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Definitions:

Optimal Level

The best, most favorable, or ideal level of performance, output, or operation under specific conditions.

Supply Chain

The network of all the individuals, organizations, resources, activities, and technology involved in the creation and sale of a product, from the delivery of source materials from the supplier to the manufacturer, and to its eventual delivery to the end user.

Key Factors

Critical elements or variables that significantly impact the outcome of a process, project, or evaluation.

Profitability

The financial measure indicating the extent to which a business or activity generates income exceeding its costs and expenses, reflecting its economic success.