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What is the contribution margin if the selling price is $200 and variable costs

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Question: What is the contribution margin if the selling price is $200 and variable costs are $120?

Options:

  1. $80
  2. $120
  3. $200
  4. $320

Correct Answer: $80

Solution: 

Contribution Margin = Selling Price - Variable Costs = $200 - $120 = $80.

What is the contribution margin if the selling price is $200 and variable costs

Practice Questions

Q1
What is the contribution margin if the selling price is $200 and variable costs are $120?
  1. $80
  2. $120
  3. $200
  4. $320

Questions & Step-by-Step Solutions

What is the contribution margin if the selling price is $200 and variable costs are $120?
  • Step 1: Identify the selling price. In this case, the selling price is $200.
  • Step 2: Identify the variable costs. Here, the variable costs are $120.
  • Step 3: Use the formula for contribution margin, which is Contribution Margin = Selling Price - Variable Costs.
  • Step 4: Substitute the values into the formula: Contribution Margin = $200 - $120.
  • Step 5: Calculate the result: $200 - $120 = $80.
  • Step 6: The contribution margin is $80.
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