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In order to establish negligence, the plaintiff must first prove:
Variable Costing
Variable Costing is a costing method that only includes variable costs (direct materials, direct labor, and variable manufacturing overhead) in product costs, excluding fixed manufacturing overhead.
Contribution Margin
The amount by which sales revenue exceeds variable costs of production, indicating how much contributes to covering fixed costs and generating profit.
Operating Income
A measure of a company's profitability from its regular business operations, excluding income and expenses from unusual or non-operational activities.
Absorption Costing
An accounting method that includes all manufacturing costs (both fixed and variable) in the cost of a product.
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