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Pretax Income
The amount of income earned by a business before paying income taxes.
Variable Costs
Expenses that change in proportion with the level of production or business activity, such as materials and labor directly involved in manufacturing.
Fixed Costs
Costs that remain constant for a set period of time, regardless of changes in the level of activity or volume of output.
Contribution Margin Ratio
The portion of sales revenue that exceeds variable costs, expressed as a percentage.
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