Question
The amount of a unit's sales price that helps to cover fixed expenses is its _____.A. contribution marginB. profitC. variable costD. stepped cost
Step 1
The contribution margin is the revenue remaining after subtracting the variable costs that go into producing a product. It is used to review the scalability of a product, in other words, how the revenue will increase as sales increase. Show more…
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A common name for fixed cost is "overhead." If you divide fixed cost by the quantity of output produced, you get average fixed cost. Supposed fixed cost is S1,000. What does the average fixed cost curve look like? Use your response to explain what "spreading the overhead" means.
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