Contribution Margin and Breakeven Analysis
4 - Contribution Margin and Breakeven Analysis
In this chapter, students will delve into the concept of contribution margin, which represents the difference between the revenue per unit and the variable cost per unit. They will learn how to calculate and analyze the contribution margin, and understand its significance in determining the profitability and breakeven point of a business. Additionally, students will explore sensitivity analysis and scenario planning to understand the impact of changes in pricing, costs, and volume on the overall unit economics.
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