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Fixed Costs
Expenses that do not change in total volume with changes in the level of business activity, such as rent or salaries.
Contribution Margin Ratio
A financial ratio that measures how much of each sale is available to cover fixed costs after variable costs have been paid.
Variable Costs
Charges that fluctuate in relation to the volume of business activities or production levels.
CVP Analysis
Cost-Volume-Profit Analysis, a tool that helps understand the relationship between costs, volume of sales, and profit.
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