Total revenues is subtracted from total variable costs to calculate

A. revenue margin

B. variable margin

C. contribution margin

D. divisor margin

Answer: Option C

Solution(By Examveda Team)

Total revenues is subtracted from total variable costs to calculate contribution margin. Contribution margin is a product's price minus all associated variable costs, resulting in the incremental profit earned for each unit sold. The total contribution margin generated by an entity represents the total earnings available to pay for fixed expenses and to generate a profit.