Question

Contribution margin is a. the excess of sales revenue over variable cost b. another term for volume in cost-volume-profit analysis c. the same as sales revenue d. profit

Answer 1

Answer:

a. the excess of sales revenue over variable cost

Explanation:

The contribution margin shows a difference between the sales revenue and the variable cost

And, the same formula is applied for calculating the contribution margin per unit

i.e

Contribution margin per unit = Selling price per unit - Variable expense per unit

In mathematically,

Contribution margin = Sales revenue - variable cost

Therefore, the correct answer is a.