Contribution margin lost from a decline in sales is an opportunity cost.

Question

Sarah Jacquline · Accepted Answer

Final Answer : True, Explanation :  Contribution margin is the difference between total sales revenue and total variable costs. When sales decline, the contribution margin also decreases, resulting in a loss of potential profits. This loss of potential profits is considered an opportunity cost, as it represents the forgone opportunity to earn additional revenue through increased sales.

Contribution margin lost from a decline in sales is an opportunity cost.

Definitions

Learning Objectives

Learning Objectives

Related questions