Contribution margin is
A) the amount of revenue remaining after deducting fixed costs.
B) available to cover fixed costs and contribute to income for the company.
C) sales less fixed costs.
D) unit selling price less unit fixed costs.

Question

Quizplus · Accepted Answer

Contribution margin is defined as the amount of revenue remaining after deducting variable costs, which is then available to cover fixed costs and contribute to net income for the company. Choices A, C, and D incorrectly describe the concept by either focusing on fixed costs or inaccurately defining the calculation.

Contribution Margin Is