The difference between contribution margin and gross profit as subtotals on an income statement is best explained by which of the following statements?

Please add checkmark next to the correct answer(s).

1Contribution margin does not include fixed costs.

2Gross profit includes the variable costs of production but not the fixed production costs.

3Neither contribution margin nor gross profit include selling and administrative expenses.

4Contribution margin and gross profit will be the same if production equals sales.

5None of the above.