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Definitions:
Cost Formula
An equation or method used to predict the cost associated with a certain level of activity or production volume.
Contribution Margin
The difference between sales revenue and variable costs of a product or service, highlighting how much contribution towards fixed costs and profit is made per unit sold.
Variable Costs
Costs that vary directly with the level of production or sales volume, such as raw materials and sales commissions.
Gross Margin
Gross margin is a company's net sales revenue minus its cost of goods sold, representing the efficiency with which it can produce and sell its products for a profit.
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