ENTREPRENEURIAL OPERATIONS
PRODUCTION PLANNING AND CONTROL
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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What is the formula for contribution?
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cost price-selling price
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fixed costs-variable costs
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selling price-variable cost
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selling price-cost price
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Explanation:
Detailed explanation-1: -Contribution margin is calculated as Revenue-Variable Costs. The contribution margin ratio is calculated as (Revenue-Variable Costs) / Revenue.
Detailed explanation-2: -Formulae: Contribution = total sales less total variable costs. Contribution per unit = selling price per unit less variable costs per unit. Total contribution can also be calculated as: Contribution per unit x number of units sold.
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