contribution
contribution1. In marginal-costing systems, the amount that a given transaction produces to cover fixed overheads and to provide profit. The unit contribution is normally taken to be the selling price of a given unit of merchandise, less the variable costs of producing it. Once the total contributions exceed the fixed overheads, all further contribution represents pure profit. The total contribution is the product of the unit contribution and the number of units produced. This is based on the assumptions that the marginal cost and the sales value will be constant. contribution income statement The presentation of an income statement or profit and loss account using the marginal costing layout. In such a treatment the fixed costs are not charged to the individual products produced as in absorption costing but are treated as a deduction from the total contribution of all the products. A simplified contribution income statement is shown above.
Contribution income statement. A simplified example.
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- controllability concept
- controllable contribution
- controllable costs
- controllable investment
- controllable turnover
- controllable variance
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- controller
- controlling interest
- control process
- convenience product
- conventional distribution channel
- convergence
- convergence criteria
- conversational systems
- conversion
- conversion cost
- convertible
- convertible revolving credit
- convertible term assurance
- conveyancing
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