In the following equations, based on the variable costing income statement, identify the items designated by X:

Question:

In the following equations, based on the variable costing income statement, identify the items designated by “X”:

a. Net Sales _ X = Manufacturing Margin

b. Manufacturing Margin _ X = Contribution Margin

c. Contribution Margin _ X = Income from Operations

Contribution Margin
Contribution margin is an important element of cost volume profit analysis that managers carry out to assess the maximum number of units that are required to be at the breakeven point. Contribution margin is the profit before fixed cost and taxes...