ASSIGNMENT 2

Contribution and Gross Margin

Contribution and Gross Margin

Define contribution margin and gross margin?

Gross margin is the organization's retained revenue after the cost of goods sold has been deducted. It can be explained as the percentage of total sales revenue retained by the organizational operations after it has incurred the costs associated with producing the goods or services sold. In contrast, contribution margin is revenue earned through sales after deducting all the direct costs. (Berman, 2006)

What type of cost goes into each?

Gross margin is affected by the cost of sales, which is the amalgamation of the purchases and all the ...