The contribution margin on the income statement does NOT factor in which of the following? Select...
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The contribution margin on the income statement does NOT factor in which of the following? |
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| Select One | ||
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A. |
Depreciation |
|
|
B. |
Direct labor costs of products |
|
|
C. |
Direct material costs of products |
|
|
D. |
Both B and C |
Homework Answers
A. depreciation.
contribution margin = sales amount - variable costs.
Depreciation is a fixed costs and will not be considered in calculation of contribution margin.
Direct labor costs and direct material costs are variable costs and will be factored into the calculation of contribution margin.
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