| A | B |
|---|
| Breakeven point | The point where revenues equals all costs, fixed and variable |
| Contribution margin | The remainder of sales less variable costs. Needed to cover fixed costs. |
| Contribution margin ratio | The contribution margin expressed as a percentage of sales. |
| Relevant range | The range of production activity for which cost assumptions are reasonalbly accurate. Based on experience. |
| Blended contribution margin | Used when calcualting the contribution margin of more than one product. |
| Variable costs | Costs that vary with activty. |
| Fixed costs | Costs that do not vary. Static in nature for the most part. |
