The contribution margin is equal to:
A)sales minus cost of goods sold.
B)sales minus variable expenses.
C)sales minus fixed expenses.
D)sales minus operating expenses.

Question

Quizplus · Accepted Answer

Contribution margin is the amount by which revenue from sales exceeds variable costs. Therefore, it is calculated as sales minus variable expenses. Option A is incorrect because cost of goods sold includes both variable and fixed costs. Option C is incorrect because fixed expenses are not included in contribution margin. Option D is incorrect because operating expenses include both fixed and variable costs.

The Contribution Margin Is Equal To