The contribution margin is deﬁned as the difference between the:
A) Unit sales price and the total cost per unit.
B) Unit sales price and the variable cost per unit.
C) Variable and ﬁxed costs per unit.
D) Pre-tax and after-tax costs per unit.
E) Unit sales price and the pre-tax cost per unit.

Question

Quizplus · Accepted Answer

Contribution margin is the amount of money that is available to cover fixed costs and contribute to profits after the variable costs have been deducted from the unit sales price. Therefore, the contribution margin is the difference between the unit sales price and the variable cost per unit. Option B correctly represents this definition.

The Contribution Margin Is Deﬁned as the Difference Between The