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I know i should probably already know this but could someone please clear up the difference between contribution & profit for me?
Thanks
🙂In marginal costing, contribution is what you get when you deduct the variable costs from the sales revenue. Then, after deducting the fixed costs from your contribution, you get the profit before tax.
So basically, the difference between contribution and profit are the fixed costs.
Hope I managed to put it simple.
Best of luck!
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