CIMA BA2 · Chapter 4 · Question 5 of 8
In marginal costing, what is meant by 'contribution'?
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: A) Sales revenue minus all variable costs
Explanation
Contribution is sales revenue less all variable costs (variable production, selling and distribution costs). It is the amount available to contribute first towards fixed costs and then towards profit.
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