If the direct material cost of sold goods is $4500 and revenues are $9000, then the contribution margin would be _________?
Correct answer: B. $4,500
- A. −$13500
- B. $4,500
- C. −$4500
- D. $13,500
Explanation
Contribution margin is revenue minus variable cost, so $9,000 − $4,500 = $4,500. The negative options reverse the subtraction, while $13,500 adds the two amounts.
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About Cost Accounting
Cost accounting measures and analyses the cost of producing goods or providing services for planning, control and pricing decisions. It covers direct and indirect costs, fixed and variable costs, job and process costing, break-even analysis, marginal costing, overhead allocation, and the difference between product cost and period cost.
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