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K – Is used as an abbreviation for 1,000. For example, $225K would be understood to mean $225,000, and $3.6K would be understood to mean $3,600. Multiple K's are not commonly used to represent larger numbers. In other words, it would look odd to use $1.2KK to represent $1,200,000. Ke – Is used as an
Contribution margin (CM), or dollar contribution per unit, is the selling price per unit minus the variable cost per unit. "Contribution" represents the portion of sales revenue that is not consumed by variable costs and so contributes to the coverage of fixed costs. This concept is one of the key building blocks of break-even analysis. [1]
The average price per unit depends on both unit prices and unit sales of individual SKUs. The average price per unit can be driven upward by a rise in unit prices, or by an increase in the unit shares of higher-priced SKUs, or by a combination of the two.
Gross margin can be expressed as a percentage or in total financial terms. If the latter, it can be reported on a per-unit basis or on a per-period basis for a business. "Margin (on sales) is the difference between selling price and cost. This difference is typically expressed either as a percentage of selling price or on a per-unit basis.
It is only possible for a firm to pass the break-even point if the dollar value of sales is higher than the variable cost per unit. This means that the selling price of the goods must be higher than what the company paid for the good or its components for them to cover the initial price they paid (variable and fixed costs).
Contribution margin per unit is the difference between the price of a product and the sum of the variable costs of one unit of that product. Variable costs are all costs that will increase with greater unit sales of a product or decrease with fewer unit sales (as opposed to fixed costs, which are costs that will not change with sales level over an assumed possible range of sales levels).
Similarly, the number of units bought is added to beginning inventory to get current goods available for sale. After each purchase, cost of current inventory is divided by current goods available for sale to get current cost per unit on goods. Also during the year, multiple sales happen. The Current goods available for sale is deducted by the ...
Total costs = fixed costs + (unit variable cost × number of units) Total revenue = sales price × number of unit. These are linear because of the assumptions of constant costs and prices, and there is no distinction between units produced and units sold, as these are assumed to be equal.