Incremental cost is an important calculation for understanding numbers at different levels of scale. The calculation is used to display change in cost as production rises. If you manufacture one unit ...

Investopedia contributors come from a range of backgrounds, and over 25 years there have been thousands of expert writers and editors who have contributed. Charlene Rhinehart is a CPA , CFE, chair of ...

The variable contribution margin, also known as the contribution margin or gross profit, describes the amount of profit generated by the sale of an item for a company. The variable contribution margin ...

The world of microeconomics and business decision-making hinges upon a key concept: marginal cost. In the simplest terms, marginal cost represents the expense incurred to produce an additional unit of ...

In traditional cost accounting for manufacturing, categorizing costs as fixed or variable has been part of accepted practice for a long time. In recent years, the practice has diminished because this ...

In accounting and business, the breakeven point (BEP) is the production level at which total revenues equal total expenses.

There are many costs associated with running a business, but all of those costs don’t fall into the same bucket. One type is overhead costs, which are expenses not tied directly to the production of a ...

Fixed expenses are easier to plan around because they stay the same from one month to the next. Variable expenses, on the other hand, are less predictable. Understanding both types and how they impact ...