Question

Contribution margin means: what remains from total sales after deducting fixed expenses. what remains from total sales after deducting cost of goods sold. the sum of cost of goods sold and variable expenses. what remains from total sales after deducting all variable expenses.

Answer 1

Contribution margin means WHAT REMAINS FROM TOTAL SALES AFTER DEDUCTING ALL VARIABLE EXPENSES. Contribution margin is defined as the selling price minus variable cost. It is the ability of a company to cover variable costs with revenue. The amount left over, which is called contribution cover fixed costs and profits.