What is the difference between gross margin and contribution margin, and which is more relevant for budgeting profitability?

What is the difference between gross margin and contribution margin, and which is more relevant for budgeting profitability?

• A. Gross margin is revenue minus COGS; contribution margin is revenue minus variable costs
• B. Gross margin equals net income; contribution margin equals gross margin minus taxes
• C. Gross margin is revenue minus fixed costs; contribution margin is revenue minus total costs
• D. Gross margin equals revenue minus variable costs; contribution margin equals revenue minus COGS

Answer: (A)