Asked by Rebecca Dooley on Jun 15, 2024
Verified
Contribution margin is also known as gross margin.
Gross Margin
Gross margin is a company's net sales revenue minus its cost of goods sold, representing the efficiency of a company in managing its direct costs.
- Comprehend the notion of contribution margin and its application in evaluating business success.
Verified Answer
AF
Aimee FloresJun 21, 2024
Final Answer :
False
Explanation :
Contribution margin and gross margin are two distinct metrics. Contribution margin is calculated by subtracting variable costs from sales revenue, while gross margin is calculated by subtracting the cost of goods sold (which includes both variable and fixed costs directly associated with production) from sales revenue.
Learning Objectives
- Comprehend the notion of contribution margin and its application in evaluating business success.
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