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The contribution margin is an important number to calculate when figuring out the CVP analysis for sales. This number represe
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Answer #1

Answer -

Contribtion Margin is The dollers each additional item sold will provide to cover fixed cost.

Contribution Margin -

When we deduct selling price and variable cost we will get contribution margin,

Other Options -

1. Contribution margin is not the price of our item as this value is derived by selling price minus variable cost.


2. This can not be the the profit of the company per item sold as Contribution margin does not take into consideration fixed cost.


3. Correct. Because the contribution margin is value that used by the company to pay fixed cost to gain profit.

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