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16 August, 20:30

Contribution margin is:

Sales less cost of goods sold.

Sales less variable production, variable selling, and variable administrative expenses.

Sales less variable production expense.

Sales less all variable and fixed expenses.

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  1. 16 August, 20:56
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    Sales less variable production, variable selling, and variable administrative expenses.

    Explanation:

    On a contribution margin income statement the variable administrative and variable selling are considered as variable cost and used to determinate the contribution margin.

    Contribution margin =

    sales revenue - total variable cost

    the fixed cost are listed below the contriution,

    once subtracted from the contribution, the rest is the net income.
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