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Contribution

Forums › Ask CIMA Tutor Forums › Ask CIMA P1 Tutor Forums › Contribution

  • This topic has 1 reply, 2 voices, and was last updated 8 years ago by Cath.
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  • March 3, 2017 at 7:13 pm #375359
    tosermelinda
    Participant
    • Topics: 1
    • Replies: 0
    • ☆

    Dear Tutors,
    I couldn’t find exact answer to this question, I hope you can help me to clarify:
    When calculating contribution per unit (and using e.g. at break-even analysis), should we deduct variable other costs as well? I mean besides variable production cost, should we remove other (selling, distribution) variable costs from the selling price?

    Thank you in advance!

    March 3, 2017 at 8:44 pm #375374
    Cath
    Participant
    • Topics: 0
    • Replies: 447
    • ☆☆☆

    Hi – yes all variable costs should be deducted when calculating contribution per unit – this includes all variable production costs as well as all variable selling/ distribution expenses too.

    Hope that clarifies
    Kindest Regards
    Cath

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