Contribution Margin Is the Amount Remaining After

question 157

Multiple Choice

Contribution margin is the amount remaining after:

• A)variable expenses have been deducted from sales revenue.
• B)fixed expenses have been deducted from sales revenue.
• C)fixed expenses have been deducted from variable expenses.
• D)cost of goods sold has been deducted from sales revenues.

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Definitions:

Industry-wide Price

The average or standard price level for goods and services across a specific industry or market.

Total Profit

The total earnings of a business after subtracting all costs, including both fixed and variable costs, from total revenue.

Average Total Cost

The total cost of production divided by the total quantity produced, including both fixed and variable costs.

Average Variable Cost

The total variable costs (costs that change with the level of output) divided by the quantity of output produced.