Contribution margin: The distinction between sales and variable expenses is referred to as contribution margin.
What do you mean by sales?
A sale is a deal in which two or more parties exchange money for the buyer receiving physical or intangible products, services, or assets.
What do you mean by variable costs?
An expense for a business called a variable cost varies according on how much is produced or sold.
Contribution margin = Sales - variable costs
We know that, Contribution margin- fixed costs = net operating income.
And contribution margin -fixed costs = net operating income.
$4,000 = Contribution margin - $10,000
Contribution margin = $4,000 + $10,000
= $14,000
Option d. is correct answer.
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