The formula to calculate the contribution margin is ___________?
Correct answer: A. revenue - all variable cost
- A. revenue - all variable cost
- B. revenue + all variable cost
- C. cost + revenue
- D. revenue - breakeven units
Explanation
Contribution margin is the amount remaining from revenue after deducting all variable costs, so it is revenue minus all variable cost. It contributes toward fixed costs and 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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