Question

40. Contribution margin contribute to meet which one of the following options?
(A) Variable cost
(B) Fixed cost
(C) Opening cost
(D) Net profit
the bort oyamnle of​

Answer 1

(B) Fixed cost

will be the answer

Answer 2

The correct option is (B) Fixed Cost

• Contribution margin is the excess of selling price over the variable costs per unit.
• It is the fundamental key in break-even analysis.
• Labor intensive companies have a low contribution margin while capital-intensive companies have a higher contribution margin.
• It helps to separate the profit and fixed costs of a product.