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The smallest unit of a pure substance that consists of two or more atoms held together by a chemical bond is a molecule.
More watts means it uses more energy per second (watt is a unit of power). If it is a light-bulb of the same type of technology, the higher-watt light bulb would also give off more light.
a high unit contribution is preferred for profitability.
If there is only increase in selling price per unit without the change in the cost of the product then contribution margin per unit will also increase but if cost per unit is more increase then increase in selling price per unit then contribution margin per unit will decrease.
Contribution margin ratio is overall total contribution margin while contribution margin ration per unit is the allocation of total production contribution margin to per unit basis.
Unit contribution margin is the per unit contribution by any unit sold towards recovering fixed cost and then achieving target profit.
Contribution margin per unit is the contribution which contribute by sales of one unit for the recovery of fixed cost after fulfiling the variable cost of product.
The contribution per machine hour is the contribution per unit divided by the number of machine hours per unit.
sales-variable coste= contribution margin
Contribution margin per unit = Contribution margin / number of units of products Contribution margin ratio = Contribution margin / Net sales The formula is different for both situations because contribution margin per unit calculates the contribution margin for one unit of product while contribution margin ratio calculates the contribution margin for total overall sales as overall sales may be included different mix of products with diff rent fixed and variable costs that's why both of these are calculated separately
Contribution margin ratio determines the percentage of variable cost in over all sales while contribution margin per unit tells the variable cost portion in per unit total cost or sales price.
The contribution margin is the difference between the per-unit variable cost and the selling price per unit.
Importance of Cost Volume Profit (CVP) Analysis:The most profitable combination of variable cost, fixed cost, selling price and sales volume can be found with the help of cost volume profit analysis. If fixed costs can be reduced by a greater amount, the profits can sometimes be increased by reducing the contribution margin.More commonly, however, we have seen that the way to improve profits is to increase the total contribution margin figure, Sometimes this can be done by reducing the fixed costs (such as advertising) and thereby increasing volume; and some times it can be done by trading off variable and fixed costs with appropriate changes in volume. Many other combinations of factors are possible.The size of the unit contribution margin (and the size of the contribution margin ratio - CM ratio) is very important. For example, the greater the unit contribution margin, the greater is the amount that a company will be willing to spend to increase unit sales. This explains in part why companies with high unit contribution margin (such as auto manufacturers) advertise so heavily, while companies with low unit contribution margin (such as dishware manufacturers) tend to spend much less for advertising.In short, the effect on the contribution margin holds the key to many decision.
For example, if the per-unit variable cost is $15 and selling price per unit is $20, then the contribution margin is equal to $5. The contribution margin may provide a $5 contribution toward the reduction of fixed costs or a $5 contribution to profits.