Final answer:
Contribution margin and gross margin are different: the former subtracts variable costs from revenue, while the latter subtracts the cost of goods sold (including variable and fixed costs) from revenue.
Step-by-step explanation:
Contribution margin and gross margin are not the same thing; hence, the statement is False. Contribution margin is calculated by subtracting variable costs from sales revenue, whereas gross margin is calculated by subtracting the cost of goods sold (COGS), which includes both variable and fixed costs directly associated with the production of goods, from sales revenue. In essence, the contribution margin reflects the incremental money generated for each product sold after covering variable costs, while gross margin shows the total profit a company makes after subtracting the costs directly associated with producing the goods it sells.