Assumes that the percentage of each product sold is constant; is used instead of the single product contribution margin in multi-product breakeven analysis; is based on the relative percentage of each unit sold.
A business's contribution margin – also called the gross periphery – is the plutocrat left over from deals after paying all variable charges associated with producing a product. Abating fixed charges, similar to rent, outfit plats, and hires from your donation periphery yields your net income or profit. donation per unit is the selling price per unit minus the variable cost per unit.
" donation" represents the portion of the profit of the deal that isn't consumed by variable costs and so contributes to the content of fixed costs. The contribution periphery is calculated as profit-Variable Costs. The donation periphery rate is calculated as( profit-Variable Costs) profit.
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