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The frequency theory of pitch makes good sense, but it has a major problem. What is this problem?
Contribution Margin Ratio
The percentage of each sale that exceeds the variable costs of production.
Break-even Point
The level of production or sales at which total revenues equal total expenses, resulting in neither profit nor loss.
Margin of Safety
The difference between actual or projected sales and the break-even point, indicating the cushion a business has before it incurs a loss.
Operating Leverage
A measure of how sensitive net operating income is to a given percentage change in dollar sales.
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