Category: Bookkeeping

As we said earlier, variable costs have a direct relationship with production levels. All you have to do is multiply both the selling price per unit and the variable costs per unit by the number of units you sell, and then subtract the total variable costs from the total selling revenue. The key component of… Continue reading Contribution Margin CM Formula + Calculator

The contribution margin is the amount of revenue in excess of variable costs. One way to express it is on a per-unit basis, such as standard price (SP) per unit less variable cost per unit. Management uses the contribution margin in several different forms to production and pricing decisions within the business. Step 2 of… Continue reading Contribution Margin CM Formula + Calculator

At the bottom of your income statement, you’ll calculate your company’s net profit or loss for the time frame of the report. For example, if your income statement covers the past year, this section of your report will show how much money your business made or lost during that time. Both the income statement and… Continue reading Financial Statements