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Variable Costs
Expenses that change in proportion to the amount of goods produced or sold, like labor and material costs.
Contribution Margin
The amount remaining from sales revenue after variable expenses have been deducted, indicating how much revenue is available to cover fixed costs and generate profit.
Variable Costs
These are expenses that vary directly with the level of production or sales volume; they rise as production increases and fall as production decreases.
Contribution Margin Ratio
The percentage of sales revenue that remains after deducting variable costs, used to cover fixed costs and generate profit.
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