A. revenue – all variable cost
B. revenue + all variable cost
C. cost + revenue
D. revenue – breakeven units
✅ The correct answer is option A.
Formula to calculate contribution margin is revenue – all variable cost. Also known as dollar contribution per unit, the measure indicates how a particular product contributes to the overall profit of the company.
Formula to calculate contribution margin is revenue – all variable cost. Also known as dollar contribution per unit, the measure indicates how a particular product contributes to the overall profit of the company.