Asked by Ranjani Ramaswamy on Jul 05, 2024
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The total contribution margin is calculated as the difference between
A) sales price and variable cost per unit.
B) sales price and fixed cost per unit.
C) total revenue and total variable cost.
D) total revenue and total cost.
Total Contribution Margin
The overall difference between sales revenue and variable costs, indicating the amount available to cover fixed costs and generate profit.
Total Revenue
The overall amount of income generated by a business from its activities, such as sales of goods or services, before deducting expenses.
Total Variable Cost
The sum of all costs that vary directly with the level of production or output, such as raw materials and direct labor expenses.
- Comprehend the notion of contribution margin and its significance in the context of break-even analysis.
Verified Answer
Learning Objectives
- Comprehend the notion of contribution margin and its significance in the context of break-even analysis.
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