Contribution margin tells the management for important decision that how much a single unit contributing towards recovery of fixed cost.Activity based costing allocates the overhead costs to activities based on number of activities instead of predetermined rate.
A margin that is creative.
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.
Formula for calculating average Contribution margin Average contribution margin = total contribution margin / total number of units
Contribution margin for per machine hour is as follows:total contribution margin / number of machine hours = contribution margin per hour
In Economics, marginal decision making helps to analyze various factors. When you make a decision at the margin, you evaluate rationality in an attempt to come to the best choice.
investment, financial markets, business accounting
whether or not to go on vacation
A) wheather of not to hire 100 new workers
opportunity cost
A) wheather of not to hire 100 new workers
Thinking about the costs and benefits of making changes in behavior. when you make a decision, most people think on the margin, meaning they think about the positive and negative benefits of making one decision rather than another.
whether to spend your two-week vacation on the shore or in town
The concept of intensive margin refers to the level of output or activity within an existing range of products or services. In business operations, understanding the intensive margin can help decision-makers optimize resources and focus on improving efficiency and profitability within their current offerings. By analyzing and adjusting the intensive margin, businesses can make informed decisions on how to allocate resources, streamline processes, and enhance overall performance.
Follow your heart, it will lead you to the right decision
Making a decision at the margin is possible only in situations when the available alternatives can be divided into increments.
opportunity cost