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What is Contribution?
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Answer / h.r. sreepada bhagi
In Cost Accounting, the Term Contribution =
Sales Revenue / Sales Income Income - Variable cost of
Products sold.
Example : If 100000 Units of a product are sold @ Rs.10/-
unit, Sales revenue is Rs.10,00,000/-. If the variable cost
of these 1 Lac. units is Rs.5/- per unit, total variable
cost of products sold will be Rs.5,00,000/-. Hence
Contribution is Rs.5,00,000/-
| Is This Answer Correct ? | 7 Yes | 2 No |
Answer / akanksha saini
In cost-volume-profit analysis, a form of management
accounting, contribution margin is the marginal profit per
unit sale. It is a useful quantity in carrying out various
calculations, and can be used as a measure of operating
leverage. Typically, high contribution margins are prevalent
in the labour-intensive tertiary sector while low contribution
margins are prevalent in the capital-intensive industrial
sector.
| Is This Answer Correct ? | 2 Yes | 0 No |
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