Yes, contribution margin is the difference between net sales revenue and variable costs.
When we calculate gross profit, we derive it by the below formula -
Net sales - variable costs = contribution (-) fixed cost = gross profit.
Therefore, the correct answer is TRUE.
Contribution margin is the difference between net sales revenue and variable costs O O True False
Contribution margin ratio is computed by O A. dividing sales revenue by contribution margin. OB. dividing contribution margin by sales revenue. O c. dividing contribution margin by operating income. OD. dividing operating income by contribution margin.
Pluto Travel Contribution Margin Income Statement Three Months Ended March 31, 2016 Net Sales Revenue $318,500 Variable Costs 111,475 Contribution Margin 207,025 Fixed Costs 170,000 Operating Income $37,025 For its top managers, Pluto Travel formats its income statement as follows: Pluto's relevant range is between sales of $256,000 and $362,000. 1. Calculate the contribution margin ratio. 2. Prepare two contribution margin income statements: one at the $256,000 sales level and one at the $362,000 sales level. (Hint: The proportion of...
Under variable costing, contribution margin is equal to: Select one: A. Contribution Margin - Fixed Costs o O B. Sales - Fixed Costs C. Sales - Variable Costs D. Sales - Variable Costs - Fixed Costs O E. Variable costing does not calculate contribution margin
Practice Question 26 On a CVP income statement O Sales - Fixed costs = Contribution margin. O Sales - Variable costs = Contribution margin. O Sales - Cost of goods sold = Contribution margin. O Sales - Variable costs - Fixed costs = Contribution margin.
Question 1: Special order Sales volume in units 80 Revenue $8,000 Variable costs $1,600 Contribution margin $6,400 Fixed costs $1,300 Profit $5,100 Special order: A client wants to buy 30 units at a discounted price of $30 per unit. This is a one-time deal (i.e., a short-term decision). You have enough spare capacity to fulfill this special order without cutting back on your regular sales. a) Use the gross approach to decide whether you should take the special order: status...
Question 1: Special order Sales volume in units 90 Revenue $6,300 Variable costs $900 Contribution margin $5,400 Fixed costs $1,600 Profit $18 Special order: A client wants to buy 10 units at a discounted price of $30 per unit. This is a one-time deal (l.e., a short-term decision). You have enough spare capacity to fulfill this special order without cutting back on your regular sales. a) Use the gross approach to decide whether you should take the special order: status...
21. Variable costs are $400,000 and the contribution margin (CM) ratio is 0.20 (20%). If target profit (net income) is $50,000, how much are fixed costs? a $75,000 b. $50,000 c. $350,000 d. $2,000,000 22. Contribution margin is the amount of sales revenue remaining after deducting a. mixed costs. b. fixed costs c. variable costs. d. factory overhead costs. 23. At Harry's Company, maintenance costs are a mixed cost. At the low level of activity (200 direct labor hours), maintenance...
21. Variable costs are $400,000 and the contribution margin (CM) ratio is 0.20 (20%). If target profit (net income) is $50,000, how much are fixed costs? a $75,000 b. $50,000 c. $350,000 d. $2,000,000 22. Contribution margin is the amount of sales revenue remaining after deducting a. mixed costs. b. fixed costs c. variable costs. d. factory overhead costs. 23. At Harry's Company, maintenance costs are a mixed cost. At the low level of activity (200 direct labor hours), maintenance...
Question 1: Special order Sales volume in units 80 Revenue $7.200 Variable costs $1,600 Contribution margin $5.500 Fixed costs $1,500 Prot $4,100 Special orders: A client wants to buy units at a counted price of $0 per unit. This is a one-time deale, a short-term decision). You have enough spare capacity to fulfil this special order without cutting back on your regular sales a) Use the gross approach to decide whether you should take the special orders status quo (no...
Question 1: Special order Sales volume in units 90 Revenue $8,100 Variable costs $2,700 Contribution margin $5,400 Fixed costs $1,600 Profit $3,800 Special order: A client wants to buy 40 units at a discounted price of $40 per unit. This is a one-time deal (i.e., a short-term decision). You have enough spare capacity to fulfill this special order without cutting back on your regular sales. a) Use the gross approach to decide whether you should take the special order: status...