Which of the following would not be an acceptable way to express contribution margin?
A) Sales minus variable costs
B) Sales minus unit costs
C) Unit selling price minus unit variable costs
D) Unit contribution margin divided by unit selling price

Question

Quizplus · Accepted Answer

Contribution margin is typically defined as sales revenue minus variable costs. It can be expressed on a per unit basis (unit selling price minus unit variable costs) or for total sales (total sales minus total variable costs). Option B, "Sales minus unit costs," is incorrect because "unit costs" could imply both variable and fixed costs, not just variable costs. The contribution margin specifically excludes fixed costs.

Which of the Following Would Not Be an Acceptable Way