Which of the following is defined as the difference between total sales in dollars and total variable expenses?
A) Margin of safety.
B) Operating income.
C) The gross margin.
D) The contribution margin.

Question

Quizplus · Accepted Answer

The difference between total sales in dollars and total variable expenses is known as the contribution margin. It represents the amount of revenue that is available to cover fixed expenses and generate a profit. The other options are not the correct definition of this calculation. The margin of safety is the amount of sales that can decline before a company incurs a loss, operating income is the result of subtracting all expenses from gross profit, and the gross margin is the difference between total sales and cost of goods sold.

Which of the Following Is Defined as the Difference Between