The contribution margin in break- even analysis is derived by subtracting
A)variable cost per unit from fixed costs.
B)fixed costs from variable costs.
C)price from variable costs.
D)fixed costs from price.
E)variable cost per unit from price.

Question

Quizplus · Accepted Answer

Contribution margin represents the amount of revenue that is left over after the variable costs are covered. It is calculated by subtracting the variable cost per unit from the price. Therefore, the correct answer is E) variable cost per unit from price.

The Contribution Margin in Break- Even Analysis Is Derived by Subtracting