In CPV analysis/ marginal costing, the term contribution is used. What does Contribution mean to you?

Q: How do you calculate contribution margin?

A: The contribution margin can be calculated by deducting the variable cost from the sales revenue.

Q: Define product cost with an example?

A: Cost: Cost refers to the expenses incurred by the business to earn revenue from sales, in other…

Q: ost flow methods and assumptions. What

A: The different cost flow methods and assumptions are as follows: FIFO LIFO Weighted average

Q: what is an indirect cost and how is it different than a direct cost?

A: Indirect Cost: Indirect costs are the costs of doing business that are not easily identified with a…

Q: Is there a difference between relevant costs and incremental costs? Explain

A: Relevant cost: Relevant cost is the cost which is relevant in decision making of a project, and…

Q: What is interpretation of the usefulness of the contribution margin concept?

A: Contribution margin The additional profit gained for each unit sold is calculated by subtracting the…

Q: Why are the terms direct costs and indirect costs independent of the terms fixed costs and variable…

A: The terms "direct costs" and "indirect costs" are independent of the terms "fixed costs" and…

Q: Distinguish between indirect costs and direct costs.

A: Direct Costs and Indirect Costs are two important costs. Direct costs are those costs which are…

Q: What does the Unit contribution margin express?

A: Break Even Point:                 Break Even Point is defined as the level where there is no profit…

Q: What does the Contribution margin equation express?

A: Break Even Point:                 Break Even Point is defined as the level where there is no profit…

Q: What is cost approach measurement?

A: A process that involves finding out the economic value or the fair value of a business entity refers…

Q: efine cost behavior.

A: The cost behaviour includes the fixed cost, variable cost, and mixed cost which would be helpful in…