| A | B |
|---|
| Total costs | All costs for a specific period of time |
| Unit cost | The amount spent for one unit of a specific product or service |
| Variable cost | Costs that change in direct proportion to a change in the number of units |
| Fixed cost | Costs that remain constant regardless of change in business activity |
| Gross profit | Net sales minus cost of merchandises sold |
| Unit contribution margin | Unit selling price minus the unit variable costs |
| Contribution margin | Net sales minus all variable costs; used to determine the income available to cover fixed costs and provide a profit |
| Contribution income statement | Statement that reports all costs as variable or fixed and shows the contribution margin |
| Contribution margin ratio | Contribution margin stated as a percentage of sales; divide the contribution margin by sales |
| Sales mix | Relative distribution of sales among various products |
| Breakeven point | The amount of sales at which net sales is equal to total costs and neither a net income nor a net loss occurs |
