Course Outline
Join PRO

Search Results

114 results for "contribution margin"

What is contribution margin? Author: Harold Averkamp, CPA, MBA Definition of Contribution Margin In accounting, contribution margin is defined as: revenues minus variable expenses. The contribution margin can be...

's cost of goods sold will increase in total as sales increase. Cost of goods sold will decrease in total when sales decrease. 7. Contribution margin is defined as sales (or revenues) minus variable expenses. True...

What is the contribution margin ratio? Author: Harold Averkamp, CPA, MBA Definition of Contribution Margin Ratio The contribution margin ratio is the percentage of sales revenues, service revenues, or selling price...

Break-even Point Author: Harold Averkamp, CPA, MBA 41 Q&A Popular Recent How do you calculate the break-even point in terms of sales? What is cost accounting What is the break-even point? What is the difference...

are: An increase in the company’s fixed expenses. These include rent, depreciation, salaries of managers and executives, etc. A reduction in the contribution margin. Contribution margin is sales minus the variable...

What is the break-even formula? Author: Harold Averkamp, CPA, MBA Break-even Point in Units of Product The formula for determining the break-even point in units of product sold is: total fixed expenses divided by the...

Our Explanation of Break-even Point illustrates how to determine the number of units or sales dollars that will result in zero net income. The techniques rely on a product's contribution margin or contribution margin...

The result of subtracting all variable expenses from revenues. It indicates the amount available from sales to cover the fixed expenses and profit.

This ratio indicates the percentage of each sales dollar that is available to cover a company’s fixed expenses and profit. The ratio is calculated by dividing the contribution margin (sales minus all variable...

Our Explanation of Break-even Point illustrates how to determine the number of units or sales dollars that will result in zero net income. The techniques rely on a product's contribution margin or contribution margin...

in dollars (or other currencies), in units, hours of services provided, etc. The basic calculation of the break-even point in sales dollars for a year is: fixed expenses (fixed manufacturing, fixed SG&A, fixed...

all of a company’s expenses (including semivariable expenses) into fixed costs/expenses and variable costs/expenses. For simple businesses with similar products or services, the total amount of fixed...

if the products are similar. The break-even point could be determined by using an electronic spreadsheet or by using a formula. The key is to determine how each of the company’s costs and expenses behave in order to...

margin? What is the difference between a cost center and a profit center? What is budgeting? What is cost behavior? What is the margin of safety? What are mixed costs? What is responsibility accounting? What is EOQ?...

How do you calculate opportunity costs? Author: Harold Averkamp, CPA, MBA Definition of Opportunity Costs Opportunity costs are the profits a company (or person) missed, or the contribution margin that was missed....

Our Explanation of Income Statement helps you learn the most important features of a corporation's income statement (also known as the statement of operations or profit and loss statement). We provide more understanding...

Cost and Managerial Accounting Author: Harold Averkamp, CPA, MBA 50 Q&A Popular Recent What is the cost of goods manufactured? What is contribution margin? What is prime cost? What is scrap value? What is the...

The benefit foregone by choosing another course of action. Also known as the opportunity cost. The lost opportunity is sometimes measured by the lost contribution margin (sales minus the related variable costs).

An income statement that subtracts all variable costs and expenses from revenues in order to show the contribution margin. From that is subtracted the fixed costs and expenses to arrive at net income. To learn more, see...

Calculations Author: Harold Averkamp, CPA, MBA 28 Q&A Popular Recent How do I calculate the after-tax cost of debt? What does per annum mean? How do you divide the cost of real estate into land and building? What is...

in the company’s selling prices An unfavorable change in the mix of products sold In short, if a company’s contribution margin per unit decreases, the company’s break-even point will increase. Join PRO to Track...

The next best benefit foregone. The opportunity lost. Often measured as the contribution margin given up by not doing an activity. For example, if a sole proprietor is foregoing a salary and benefits of $50,000 at...

of goods sold will be $18,000. Knowing how costs behave when sales or other activities change will allow you to better understand how a company’s gross profit and net income will change. It also allows you to quickly...

want to add a website to your already successful business. You are confident that it will increase your company’s contribution margin by $1,500 a week. A highly-trusted and successful firm will complete the website...

Must-Watch Video

Learn How to Advance Your Accounting and Bookkeeping Career

  • Perform better at your current job
  • Refresh your skills to re-enter the workforce
  • Pass your accounting class
  • Understand your small business finances
Watch the Video

Join PRO or PRO Plus and Get Lifetime Access to Our Premium Materials

Read all 2,645 reviews

Features

PRO

PRO Plus

Features
Lifetime Access (One-Time Fee)
Explanations
Quizzes
Q&A
Word Scrambles
Crosswords
Bookkeeping Video Training
Financial Statements Video Training
Flashcards
Visual Tutorials
Quick Tests
Quick Tests with Coaching
Cheat Sheets
Business Forms
All PDF Files
Progress Tracking
Earn Badges and Points
Certificate - Debits and Credits
Certificate - Adjusting Entries
Certificate - Financial Statements
Certificate - Balance Sheet
Certificate - Income Statement
Certificate - Cash Flow Statement
Certificate - Working Capital
Certificate - Financial Ratios
Certificate - Bank Reconciliation
Certificate - Payroll Accounting

About the Author

Harold Averkamp

For the past 52 years, Harold Averkamp (CPA, MBA) has worked as an accounting supervisor, manager, consultant, university instructor, and innovator in teaching accounting online. He is the sole author of all the materials on AccountingCoach.com.

Learn More About Harold

Certificates of
Achievement

Certificates of Achievement

We now offer 10 Certificates of Achievement for Introductory Accounting and Bookkeeping:

  • Debits and Credits
  • Adjusting Entries
  • Financial Statements
  • Balance Sheet
  • Income Statement
  • Cash Flow Statement
  • Working Capital and Liquidity
  • Financial Ratios
  • Bank Reconciliation
  • Payroll Accounting
Badges and Points
  • Work towards and earn 30 badges
  • Earn points as you work towards completing our course
View PRO Plus Features
Course Outline
Take the Tour Join Pro Upgrade to Pro Plus