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SSC Financial and Cost Accounting P-1 QUESTION #6155
Question 1

Sales revenue $500,000; Total costs $400,000; Fixed costs $120,000. What was the total contribution?

  • $100,000
  • $220,000✔️
  • $280,000
  • $380,000
Correct Answer Explanation

Option B ($220,000) is correct.

Variable costs = $400,000 − $120,000 = $280,000

Contribution = $500,000 − $280,000 = $220,000

(Note: Profit = $220,000 − $120,000 = $100,000 — that is Option A, not the same as contribution.)