Contribution margin a can only be expressed in per unit or p

Contribution margin:

a) can only be expressed in per unit or percentage terms

b) can only be a variable item

c) is calculated as Sales – Variable Costs

d) is the same as Gross Margin

Solution

Answer:c) is calculated as Sales – Variable Costs

Contribution margin is an absolute figure.Contribution margin ratio can only be expressed in per unit or percentage terms.

Gross Margin is sales - cost of goods sold where cost of goods sold consists of both variable and fixed product costs.Whereas Contribution margin is sales less variable product costs and variable period expenses.