Contribution margin is

A) the excess of sales revenue over variable cost
B) another term for volume in the "cost-volume-profit" analysis
C) profit
D) the same as sales revenue

Contribution Margin

Contribution margin represents the difference between sales revenue and variable costs, indicating how much revenue contributes towards covering fixed costs and generating profit.

Sales Revenue

The total amount of money generated from the sale of goods or services before any costs or expenses are deducted.

Variable Cost

Costs that vary directly with the level of production or sales volume, such as raw materials and direct labor.