Contribution margin
A) is always the same as gross profit margin.
B) excludes variable selling costs from its calculation.
C) is calculated by subtracting total manufacturing costs per unit from sales revenue per unit.
D) equals sales revenue minus variable costs.

Question

Quizplus · Accepted Answer

Contribution margin equals sales revenue minus variable costs. It is different from gross profit margin, which also includes fixed costs in its calculation. Additionally, variable selling costs are included in the calculation of contribution margin. The calculation does not involve total manufacturing costs per unit.

Contribution Margin