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The distinction between long- and short-term memory:
Contribution Margin Ratio
A financial metric that shows the percentage of sales revenue that exceeds variable costs, indicating how much revenue contributes to fixed costs and profit.
Break-Even Point
The point at which total costs and total revenue are equal, meaning no net loss or gain is incurred.
Variable Manufacturing Costs
Costs that fluctuate with the amount of production output, including expenses like raw materials, direct labor, and other costs that change with production volume.
Fixed Overhead
Costs that do not change with the level of production or sales, including expenses such as rent, salaries, and insurance, which are incurred regardless of business activity levels.
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