Answer (B) is correct . Gross profit is the difference between sales price and the full absorption cost of goods sold.
Answer (A) is incorrect because Contribution margin ratio is the ratio of contribution margin (sales – variable costs) to sales.
Answer (C) is incorrect because Contribution (margin) is the difference between unit selling price and unit variable costs. Fixed costs are not considered.
Answer (D) is incorrect because The gross profit margin ratio equals gross profit divided by sales.
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