If sales are Rs 1 00 000 Variable Cost is Rs 80 000 and the Fixed Cost is Rs 10 000 the contribution...........

Finance (Phase -I & II) Analysis of Financial Statements

If sales are Rs. 1,00,000/-, Variable Cost is Rs. 80,000/- and the Fixed Cost is Rs. 10,000/-, the contribution margin will be:

Rs. 20,000/-

Rs. 10,000/-

Rs. 90,000/-

Rs. 80,000/-

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Explanation:

Contribution is the difference between sales and variable cost or marginal cost. It is excess of selling price over variable cost per unit. Contribution is also known as contribution margin or gross margin. In the given problem, contribution is 1,00,000/- (-) 80,000/-= 20,000/-