Understanding the cost of each unit you produce is essential to ensure your business remains profitable. To calculate the cost per unit, add all of your fixed costs and all of your variable costs ...

Identify cost driver for the overhead cost, and the total amount of cost driver in a multi-product production or multi-service offering. A cost driver is a business activity responsible for change in ...

The high-low method is used in cost accounting to estimate fixed and variable costs based on a business's highest and lowest levels of activity. By focusing on these extremes, the high-low method ...

Steven Nickolas is a writer and has 10+ years of experience working as a consultant to retail and institutional investors. David Kindness is a Certified Public Accountant (CPA) and an expert in the ...

The Weatherhead School of Management, part of Case Western Reserve University, provides a succinct definition of break-even analysis on its Web site of the same name: “On the surface, break-even ...

Opinions expressed by Entrepreneur contributors are their own. We recently explained the process of arriving at calculations for mark-up and gross margin. Next, we thought we would walk reader through ...

Contribution margin is used to help measure product profitability. It helps business owners understand how sales, variable costs and fixed costs all influence operating profit. The larger the ...

Portions of this article were drafted using an in-house natural language generation platform. The article was reviewed, fact-checked and edited by our editorial staff. Contribution margin is used to ...

To run a company successfully, you need to know everything about your business, including its financials. One of the most critical financial metrics to grasp is the contribution margin, which can help ...