What Are Some of the Advantages of Outsourcing

question 28

Short Answer

What are some of the advantages of outsourcing?

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Definitions:

Contribution Margin Ratio

A ratio that measures the percentage of sales revenue available to cover fixed expenses and generate profit, calculated as the contribution margin divided by sales revenue.

Annual Fixed Expenses

Expenses that do not change in total regardless of changes in the volume of activity or production levels, such as rent or salaries.

Contribution Margin

The amount remaining from sales revenue after variable expenses are deducted, showing how much contributes to covering fixed costs and earning profit.

Break-even Point

The level of production or sales at which total revenues equal total expenses, resulting in no net profit or loss.