Engineering Board Exam Reviewer · Break-Even Analysis · easy
Define "contribution margin" in break-even analysis.
- Selling price per unit minus variable cost per unit
- Total revenue minus total cost
- Fixed cost divided by units sold
- Selling price divided by variable cost
Answer
A. Selling price per unit minus variable cost per unit
Solution
Contribution margin is the difference between the selling price per unit and the variable cost per unit.
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