Contribution = Selling Price per unit/product- Variable Cost per unit/product (C=P X VC)
Contribution is the amount made per unit produced which, when sold, the money made goes towards paying off fixed costs. IT IS NOT YET PROFIT.
Another way to explain is that contribution is the difference between the variable cost of producing the unit and its selling price.
Total Contribution =Contribution per unitXQuantity of units sold(TC=CPU X Q)
Total contribution therefore is the amount made from multiple sales which contribute towareds fixed costs or overheads.
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