Question

How is "cotribution"in marginal costing omportant?

Answer 1

Contribution is the difference between sales and variable cost or marginal cost of sales. It may also be defined as the excess of selling price over variable cost per unit. ... Contribution being the excess of sales over variable cost is the amount that is contributed towards fixed expenses and profit.

Contribution is the amount which is left after subtracting variable costs from the revenues. ... Contribution margin is an important cost accounting concept. It is helpful in many making many important business decisions

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