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Part: IV Sales and Marketing > Analyzing Contributions and Margins

Chapter 19. Analyzing Contributions and Margins

Management accounting concerns itself with the internal operations and drivers of business performance. Among its primary tools are contribution analysis and break-even analysis, which use financial indicators such as these:

  • Contribution margin. This is usually defined as the sales revenue less the variable costs of production.

  • Unit contribution. This is the margin contributed by each unit sold.

  • Break-even point. This is the point in the sales process at which the revenues equal the costs of production.


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