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A car with a broken timing belt is towed to your shop. The tow truck operator set the parking brake. The vehicle has an automatic vacuum parking brake release. Because the engine can't be started, the brakes won't release. How do you get the car into the shop?
Contribution Margin
The difference between total sales revenue and total variable costs, used to cover fixed costs and generate profit.
Contribution Format
An income statement format that separates fixed and variable costs, facilitating analysis of the impact of sales volume on profit.
Unit Contribution Margin
The amount that the sale of one unit contributes toward covering fixed costs and then to profit, calculated as the selling price per unit minus the variable cost per unit.
Contribution Margin Ratio
A financial metric that shows the percentage of sales revenue remaining after variable costs are subtracted, indicating how efficiently a company can produce and sell products.
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