Tuesday, March 6, 2012

Contribution Margin

Contribution margin is the amount remaining from sales revenue after variable expenses have been deducted. It is the amount to cover fixed expenses and then to provide profits for the period.
1) Contribution Margin is used first to cover the Fixed Expenses. 2) What you have left will go in to profits.1) If the Contribution Margin will not cover the Fixed Expenses, 2) Then a loss will be assessed for that period.

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