Select from the following the incorrect statement regarding contribution margin.
A) Sales - fixed costs = contribution margin
B) Net income + total fixed costs = contribution margin
C) At the breakeven point (where the company has neither profit nor loss), total fixed costs = total contribution margin
D) Total sales revenue times the contribution margin percentage = total contribution margin

Question

Quizplus · Accepted Answer

Contribution margin is calculated as Sales minus Variable Costs, not fixed costs.

Select from the Following the Incorrect Statement Regarding Contribution Margin