Contribution chart
A contribution chart presents revenue, variable cost and fixed cost so the contribution available to cover fixed cost is visible. Depending on the layout, the gap between sales and variable cost shows contribution, and profit remains after fixed costs are covered. Label the lines and areas rather than assuming every CVP chart has the same design. The graph uses the same relevant-range and stable-price assumptions as the underlying calculations.
Worked example
Sales $50,000 less variable cost $30,000 gives contribution $20,000. With fixed cost $12,000, profit is $8,000 on the chart’s scale.
Common mistake
The full gap between sales and variable cost is contribution, not profit before subtracting fixed cost.
Where it appears in your exams
| Qualification | Exam | Relationship | Period |
|---|---|---|---|
| ACCA | PM | Supporting | September 2026–June 2027 |