If the total revenue is $9000, the total variable cost is $2000, then the contribution margin will be ___________?
Correct answer: D. $7,000
- A. $11,000
- B. −$7000
- C. $4,500
- D. $7,000
Explanation
Contribution margin is total revenue minus total variable cost: $9,000 − $2,000 = $7,000. It is the amount left to cover fixed costs and then provide profit.
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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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