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The amount of money we set aside for future consumption will be determined by
Fixed Costs
Expenses that do not fluctuate with the volume of production or sales, such as rent, salaries, and insurance.
Variable Costs
Costs that fluctuate in direct proportion to changes in levels of production or sales activity within a business.
Total Contribution Margin
The amount left over from sales revenue after variable expenses have been deducted; it contributes to covering fixed costs and generating profit.
Fixed Costs
Charges that stay the same no matter the scale of production or sales, like rent, salaries, and insurance.
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