Contribution Margin statement
Revenue
-Variable Costs
--------------------
=Contribution Margin
-Fixed Costs
---------------------
=Net Operating Income
Variable cost: total dollars
Change in proportion without output
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Brainpower
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Variable cost: cost per unit
Unchanged in relation to output
Fixed cost: total dollars
Unchanged in relation to output
Fixed cost: cost per unit
change inversely with output (more output = lower cost per unit)