Answer :
Contribution margin equals sales minus variable cost
What is contribution margin?
Contribution margin means the extent by which the sales price exceeds the variable cost, in other words, it sales price per unit minus the variable cost per unit or total sales revenue minus the total variable costs on total volume basis.
Contribution margin means the level of contribution that each sold contributes towards the recovery of the company's total fixed costs, in short, the correct option in this case, is that contribution margin is the sales minus the variable cost.
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