What does contribution margin mean on the CPA exam?
Contribution margin. Sales less variable cost. What each additional unit contributes toward fixed cost and then to profit.
Which CPA exam sections use contribution margin?
Contribution margin appears in the BAR section of the CPA exam.
Related terms
- net profit margin: Net income divided by sales.
- operating leverage: How much a company's profit moves for a given move in sales, driven by how much of its cost is fixed.
- gross profit: Sales less the cost of goods sold, before any operating expense.
- goodwill: An asset representing the future economic benefits of acquired assets not separately identified, measured as consideration less identifiable net assets.
- net sales: Gross sales less returns, allowances and discounts.