Contribution margin may be defined as a. Sales minus ending inventory cost. b. Sales minus cost...

Contribution margin may be defined as

a. Sales minus ending inventory cost.

b. Sales minus cost of goods sold.

C. Gross margin minus selling and administrative expenses.

d. Sales minus variable cost.

Solutions

Expert Solution

The correct option is D.

Contribution margin=Sales-Variable costs

Contribution margin is used to compute the breakeven point and margin of safety for the company.The Fixed costs are also deducted from Contribution margin to compute net operating income for the company.

jeff jeffy answered 1 year ago

Next > < Previous

Related Solutions

Contribution margin is: A. the excess of sales revenue over variable cost B. another...

Contribution margin is: A. the excess of sales revenue over variable cost B. another term for volume in the "cost-volume-profit" analysis C. profit D. the same as sales revenue Salim’s fixed costs are RM41, 500, the variable cost is RM12 per unit. If Salim sells the product for RM22 per unit, the breakeven point is: A. 4,150 units B. 8,300 units C. 2,075 units D. 6,225 units The fixed costs of Juara...

Calculate the contribution margin (selling price minus variable costs) and gross margin (selling price minus all...

Calculate the contribution margin (selling price minus variable costs) and gross margin (selling price minus all manufacturing costs) per gallon for each type of paint and total firm-wide profit under each of the following scenarios: Scenario A Current production, including the Virginia contract Scenario B Without either the Virginia contract or the promotion to expand sales of commercial paint Scenario C Without the Virginia contract but assuming the promotional campaign is undertaken and sales of commercial paint do in fact...

1). Contribution Margin is: a). Sales - Total Variable expenses b). Sales - Total variable expenses...

1). Contribution Margin is: a). Sales - Total Variable expenses b). Sales - Total variable expenses - Total fixed expenses c). Sales revenue per unit x Sales quantity d). Variable expense per unit x Sales quantity 2). When preparing segmented income statements fixed expense are separated into the following categories: a). Traceable and common b).Fixed and Variable c).Direct and indirect d).Product and period 3).A Co. reported: Sales $125000; Contribution margin $62000; Total fixed expenses $42000; Common fixed expenses $15000. How...

Expressing contribution margin as a percentage of sales A. is particularly useful to multiproduct firms. B....

Expressing contribution margin as a percentage of sales A. is particularly useful to multiproduct firms. B. prohibits a company from calculating break-even. C. is easier using calculus D. is encouraged when a company has large fixed costs. E. is not possible if variable cost per unit is constant.

Determine (a) the contribution margin ratio, (b) the unit contribution margin, and (c) income from operations.

Lanning Company sells 160,000 units at $45 per unit. Variable costs are $27 per unit, and fixed costs are $975,000. Determine a) the contribution margin ratio,(b) the unit contribution margin, and c) income from operations.

Determine the (a) contribution margin ratio, (b) unit contribution margin, and (c) income from operations.

Molly Company sells 20,000 units at $12 per unit. Variable costs are $9 per unit, and fixed costs are $25,000. Determine the (a) contribution margin ratio, (b) unit contribution margin, and (c) income from operations.

Price, Variable Cost per Unit, Contribution Margin, Contribution Margin Ratio, Fixed Expense For each of the...

Price, Variable Cost per Unit, Contribution Margin, Contribution Margin Ratio, Fixed Expense For each of the following independent situations, calculate the amount(s) required. Required: 1. At the break-even point, Jefferson Company sells 85,000 units and has fixed cost of $348,600. The variable cost per unit is $0.35. What price does Jefferson charge per unit? Note: Round to the nearest cent. $ 2. Sooner Industries charges a price of $127 and has fixed cost of $360,500. Next year, Sooner expects to...

Price, Variable Cost per Unit, Contribution Margin, Contribution Margin Ratio, Fixed Expense For each of the...

Price, Variable Cost per Unit, Contribution Margin, Contribution Margin Ratio, Fixed Expense For each of the following independent situations, calculate the amount(s) required. Required: 1. At the break-even point, Jefferson Company sells 95,000 units and has fixed cost of $349,700. The variable cost per unit is $0.15. What price does Jefferson charge per unit? Note: Round to the nearest cent. $ 2. Sooner Industries charges a price of $129 and has fixed cost of $421,000. Next year, Sooner expects to...

Price, Variable Cost per Unit, Contribution Margin, Contribution Margin Ratio, Fixed Expense For each of the...

Price, Variable Cost per Unit, Contribution Margin, Contribution Margin Ratio, Fixed Expense For each of the following independent situations, calculate the amount(s) required. Required: 1. At the break-even point, Jefferson Company sells 85,000 units and has fixed cost of $351,900. The variable cost per unit is $0.30. What price does Jefferson charge per unit? Note: Round to the nearest cent. $ 2. Sooner Industries charges a price of $136 and has fixed cost of $391,500. Next year, Sooner expects to...

Price, Variable Cost per Unit, Contribution Margin, Contribution Margin Ratio, Fixed Expense For each of the...

Price, Variable Cost per Unit, Contribution Margin, Contribution Margin Ratio, Fixed Expense For each of the following independent situations, calculate the amount(s) required. Required: 1. At the break-even point, Jefferson Company sells 85,000 units and has fixed cost of $346,500. The variable cost per unit is $0.10. What price does Jefferson charge per unit? Note: Round to the nearest cent. $ 2. Sooner Industries charges a price of $98 and has fixed cost of $476,500. Next year, Sooner expects to...

Subjects