The tool useful for calculating contribution margin and operating income is:
A)margin of safety.
B)sensitivity analysis.
C)the breakeven point.
D)contribution margin per unit.
E)operating leverage.

Question

Quizplus · Accepted Answer

The tool useful for calculating contribution margin and operating income is contribution margin per unit. This is because contribution margin per unit indicates the amount by which sales exceed variable costs per unit. By multiplying the contribution margin per unit by the number of units sold, we can calculate the total contribution margin, which is then subtracted from total fixed costs to arrive at operating income. Therefore, option D is the correct answer.

The Tool Useful for Calculating Contribution Margin and Operating Income