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Contribution Margin
The difference between sales revenue and variable costs, used to cover fixed expenses and then contribute to profit.
Variable Expenses
Costs that vary directly with the level of production or sales volume.
Break-even Point
The point at which total costs and total revenues are exactly the same, yielding neither a profit nor a loss.
Degree of Operating Leverage
The degree of operating leverage is a financial ratio that measures the sensitivity of a company's operating income to its sales, indicating how earnings before interest and taxes are affected by sales volume.
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