Contribution margin

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Contribution margin is a department's net profit, used to cover indirect expenses.


Definitions

According to College Accounting: A Practical Approach by Slater (13th edition)‎,

Contribution margin. A department's net profit, used to cover indirect expenses.

According to Cost Accounting by Horngren, Datar, Rajan (14th edition),

Contribution margin. Total revenues minus total variable costs.

Related concepts

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