If the contribution margin is not sufficient to cover fixed expenses:

A) total profit equals total expenses.
B) contribution margin is negative.
C) a loss occurs.
D) variable expenses equal contribution margin.

Contribution Margin

The amount by which sales revenue exceeds variable costs. It contributes to covering fixed costs and generates profit.

Fixed Expenses

Costs that do not fluctuate with changes in production level or sales volume.

Variable Expenses

Costs that vary directly with the level of production or sales volume, such as raw materials or sales commissions.