Answer (D) is correct . The contribution margin is calculated by subtracting all variable costs from sales revenue. It represents the portion of sales that is available for covering fixed costs and profit.
Answer (A) is incorrect because Gross operating profit is the net result after deducting all manufacturing costs from sales, including both fixed and variable costs.
Answer (B) is incorrect because Net profit is the remainder after deducting from revenue all costs, both fixed and variable.
Answer (C) is incorrect because The breakeven point is the level of sales that equals the sum of fixed and variable costs.
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