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Erikson's theory is based on the assumption that
Gross Margin
A company's net sales revenue minus its cost of goods sold (COGS), expressed as a percentage. It reveals how much profit a company makes before expenses.
Relevant Range
The range of activity within which the assumptions about fixed and variable cost behaviors hold true.
Fixed Manufacturing Cost
Costs that do not vary with the level of production, such as rent, salaries of permanent employees, and depreciation of factory equipment.
Manufacturing Overhead Cost
The total of all costs associated with manufacturing beyond direct materials and direct labor, including indirect expenses such as maintenance and factory utilities.
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