Contribution Margin Means

question 178

Multiple Choice

Contribution margin means:

• A)what remains from total sales after deducting fixed expenses.
• B)what remains from total sales after deducting cost of goods sold.
• C)the sum of cost of goods sold and variable expenses.
• D)what remains from total sales after deducting all variable expenses.

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Definitions:

Quantity Variances

Quantity variances are differences between the expected and actual quantities of inputs (materials, labor) used in the production process or during a specific period.

Direct Labor

The wages or salaries paid to employees who are directly involved in the production process of goods or services.

Fixed Budget

A budget that stays the same regardless of changes in activity levels, output, or sales.

Price Variance

The difference between the actual price paid for something and its standard or expected price.