Asked by Zitlaly Flores on Jul 02, 2024
Verified
Contribution margin and gross margin mean the same thing.
Contribution Margin
The amount remaining from sales revenue after variable expenses have been deducted, indicating the amount available to cover fixed costs and generate profit.
Gross Margin
The difference between sales revenue and the cost of goods sold, which represents the profitability of selling goods.
- Comprehend the distinction and significance of the contribution margin within cost-volume-profit analysis.
Verified Answer
MF
Mariana Flores5 days ago
Final Answer :
False
Explanation :
Contribution margin is the difference between sales revenue and all variable costs, while gross margin is the difference between sales revenue and the cost of goods sold (only includes variable costs related to production). Therefore, they are not the same thing.
Learning Objectives
- Comprehend the distinction and significance of the contribution margin within cost-volume-profit analysis.