Contribution Margin Is

question 45

Multiple Choice

Contribution margin is:

• A) sales less cost of sales.
• B) sales less fixed costs.
• C) sales per unit less (variable costs per unit plus fixed costs per unit).
• D) sales less variable costs.

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Definitions:

FOB Destination

FOB Destination is a shipping term indicating the seller bears the shipping costs and maintains ownership until the goods reach the buyer's location.

Periodic Inventory System

An inventory accounting system where the inventory balance is updated at specific intervals, rather than continuously.

Retained Earnings

The portion of net income that is not distributed to shareholders but is kept by the company to be reinvested in its core business or to pay debt.

Year-end Balance Sheet

A financial statement that reports a company's assets, liabilities, and shareholders' equity at the final day of the financial year.