The revenue is $11000 and all the variable cost is $6000, then the contribution margin would be ____________?
Correct answer: C. $5,000
- A. −$17000
- B. $17,000
- C. $5,000
- D. −$5000
Explanation
Contribution margin equals revenue minus total variable cost, so $11,000 − $6,000 = $5,000. It is the amount available 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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