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Explain how 'segment margin' differs from 'contribution margin'?
Contribution margin is the amount remaining from sales revenue once all variable costs have been removed ie. Contribution Margin = Sales Revenue - Variable Costs Segment margin is the margin available after a segment has covered all of its costs. It's one of the best ways to determine the long-term profitability of a segment. ie. Segment Margin = Segment's Contribution Margin - Fixed Costs traced to the Segment
What is the difference between Contribution Margin per unit and contribution margin ratio?
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.
How would you define contribution margin?
The contribution margin is the difference between the per-unit variable cost and the selling price per unit.
What is the difference between sales price per unit and variable cost per unit?
contribution margin
How do you calculate the average contribution margin?
Formula for calculating average Contribution margin Average contribution margin = total contribution margin / total number of units
Explain how 'segment margin' differs from 'contribution margin'?
Contribution margin is the amount remaining from sales revenue once all variable costs have been removed ie. Contribution Margin = Sales Revenue - Variable Costs Segment margin is the margin available after a segment has covered all of its costs. It's one of the best ways to determine the long-term profitability of a segment. ie. Segment Margin = Segment's Contribution Margin - Fixed Costs traced to the Segment
What is the difference between Contribution Margin per unit and contribution margin ratio?
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.
How would you define contribution margin?
The contribution margin is the difference between the per-unit variable cost and the selling price per unit.
What is the difference between sales price per unit and variable cost per unit?
contribution margin
Does decreasing the sales price increase the contribution margin?
No. Contribution Margin (CM) is the difference between the Sale Price and the Cost Of Goods Sold (COGS). Cost of Goods Sold = Cost of parts, materials, labor to produce the item sold. [This is also called Direct Cost.] So, we can write a simple equation: Contribution Margin = Sale Price - COGS. If Sale Price goes down and COGS stays same, then Contribution Margin goes down. -- 25 August, 2008
How do you calculate the average contribution margin?
Formula for calculating average Contribution margin Average contribution margin = total contribution margin / total number of units
What is the contribution margin per machine hour for Bales?
Contribution margin for per machine hour is as follows:total contribution margin / number of machine hours = contribution margin per hour
How do the formulas differ for contribution margin per unit and contribution margin ratio?
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
How do you calculate the breakeven point?
Formula for Breakeven point: Breakeven point = Fixed Cost / Contribution margin ratio Contribution margin ratio = Sales / contribution margin Contribution margin = sales - variable cost
How do you calculate unit contribution margin?
sales-variable coste= contribution margin
Contribution margin ratio always increases when?
The contribution margin ratio increases when?
How do you calculate the Actual Contribution Margin?
contribution margin = sales - variable cost
