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Contribution Margin
Contribution margin represents the difference between sales revenue and variable costs, indicating how much revenue contributes towards covering fixed costs and generating profit.
Sales Revenue
The total amount of money generated from the sale of goods or services before any costs or expenses are deducted.
Variable Cost
Costs that vary directly with the level of production or sales volume, such as raw materials and direct labor.
Unit Contribution Margin
The difference between the selling price per unit and the variable cost per unit, showing how much each unit contributes to covering fixed costs and earning profit.
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