Talk:Contribution margin/Archive 1
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| Archive 1 |
Contribution Margin vs. Contribution Margin Ratio vs. Profit Contribution
I was made aware of the differences in definition of what a contribution margin is. I believe that this article has got it right, the contribution margin is the Unit Revenue (Price, P) minus Unit Variable Cost (V).
It is interesting to see that investopedia, which is one of my most trusted sources on these topics, define contribution margin differently: http://www.investopedia.com/terms/c/contributionmargin.asp#axzz1rBxOekAW . It looks like they define it the way that Wikipedia defines contribution margin ratio.
Kosher tax
I just linked the "kosher tax" article to this very important concept in Management Accounting.--Lance6968 06:32, 5 October 2006 (UTC)
COGS is partly fixed
In all cases I know, which includes several multi-billion dollar industrial valuations, joint ventures and IPOs, COGS include depreciation charges, which are not variable costs. I have seen text book examples of depreciation listed separately or broken out from COS but I have not seen it in display industry financial statements.
It looks like you are saying cm = (sales + depreciation - cos - [commission + promotion + distribution])/sales. This seems reasonable becasue people can get the depreciation charge from the cash flow statement. The problem may be splitting S out of SG&A.
Another way of approaching this would be calculating the first derivative of revenue versus operating cost.
Anyway, keep up the good work. the article is helpful as is. —The preceding unsigned comment was added by Shokutaku (talk • contribs) 23:30, 26 January 2007 (UTC).
variables used
Please provide a legend of the variables and factors used in the equations.--78.48.166.179 (talk) 22:34, 30 January 2011 (UTC)