Contribution to overhead generated by a department is the same as gross profit generated by that department.

Question

Quizplus · Accepted Answer

Contribution to overhead is the amount of revenue that remains after deducting direct expenses, while gross profit is the amount of revenue that remains after deducting all costs of goods sold, including direct and indirect expenses. Therefore, contribution to overhead is not the same as gross profit.

Contribution to Overhead Generated by a Department Is the Same