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Cost-Volume-Profit Chart
A graphical tool used in managerial accounting to analyze how changes in cost and volume affect a company's profit.
Contribution Margin
The gap between a product's sales revenue and its variable expenses, which serves to offset fixed costs and produce earnings.
Variable Cost
Expenses that adjust in direct correlation with changes in production or sales levels.
Fixed Costs
Expenses that do not change with the level of production or sales activities within a certain range, such as rent, salary, insurance, and loan payments.
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