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| Contribution Margin Income Statement |
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| Cointribution Margin Ratio |
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The Contribution Margin stated as a ratio or percentage of sals. The contribution margin ratio is calculated as follows:
Contribution Margin Ratio = Contribution margin / (divided by) Sales Revenue.
For instance, $1.50/$2.50 = 60% |
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| A method of costing that takes into account the GAAP rule that requires that all manufacturing costs be treated as part of the cost of the product and counted as inventory as the product is sold. |
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| The Unit Contribution Margin tells us how much each additional unit sold contributes to the bottom line. |
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| Variable Costing Visual Fit |
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| This is a kind of costing only used for internal decision making and does not meet GAAP external reporting requirements. This type of costin only measures the variable costs ignoring fixed costs. |
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| the difference between sales revenue and the cost of goods sold. |
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