ECONOMICS

Detailed explanation-1: -Fixed costs include building payments or rental fees, utilities, annual salaries and other expenses you incur regardless of production. If your contribution falls short of fixed costs, you incur an operating loss. If it exceeds your fixed costs, you have an operating profit.

Detailed explanation-2: -The statement is False. Explanation: The contribution margin represents the difference between the sales price per unit and the variable cost per unit and not the total cost per unit. The contribution margin is then used to meet the fixed costs and generate operating income therefrom.

Detailed explanation-3: -The contribution margin is the amount of money a business has to cover its fixed costs and contribute to net profit or loss after paying variable costs. It also measures whether a product is generating enough revenue to pay for fixed costs and determines the profit it is generating.

Detailed explanation-4: -Answer and Explanation: The given statement is true.