Discussion Question

Discussion Question

Answer: Positive Contribution Margin

The positive contribution margin is the sales cost less the variable costs. The variable charges are those that will live for each unit made. For an easy demonstration, if you are making tops, you are utilizing material and it has a cost. Every time you make a top, you're utilizing that identical material and acquiring that identical cost. If you make one unit, you only get the cost once. If you make 100,000 flats, you acquire that cost 100,000 times. So despite of how numerous you make, you'll have the sales cost and the variable cost. ...