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Pretax Income
Income earned by a company before taxes have been deducted.
Variable Costs
Expenses that vary directly with the level of production or sales volume, such as raw materials and sales commissions.
Fixed Costs
Financial obligations such as rent, salaries, and insurance that do not fluctuate with changes in production or sales levels.
Contribution Margin
The amount remaining from sales revenue after variable costs have been deducted, used to cover fixed costs and generate profit.
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