Which statement about contribution margin and its use in CVP is accurate?

Which statement about contribution margin and its use in CVP is accurate?

• A. Contribution margin equals sales minus fixed costs.
• B. Contribution margin is not used in determining profitability.
• C. Contribution margin equals sales minus variable costs and is used to cover fixed costs and determine profitability.
• D. Contribution margin is irrelevant to CVP.

Answer: (C)