• Create BookmarkCreate Bookmark
  • Create Note or TagCreate Note or Tag
  • PrintPrint
Share this Page URL
Help

Chapter 20. Pricing and Costing > Using Contribution Analysis for New Products

Using Contribution Analysis for New Products

Several figures used in the previous section show that the contribution margin is calculated by subtracting a product's variable costs from its revenue. For example, in Figure 20.8, the contribution margin is $340,000. This is the result of subtracting the cost of goods sold ($279,500) and variable sales expenses ($117,000) from the sales figure of $736,500. The cost of goods sold is returned by this formula:

=Units_Sold*Variable_Cost


PREVIEW

                                                                          

Not a subscriber?

Start A Free Trial


  
  • Creative Edge
  • Create BookmarkCreate Bookmark
  • Create Note or TagCreate Note or Tag
  • PrintPrint