Contribution Margin: Contribution margin is the amount by which the sales price of a product exceeds its variable costs. After reaching the break-even point, each additional unit sold contributes directly to operating income.
[: Cost-volume-profit (CVP) analysis, which highlights the role of contribution margin in determining profitability., Operating Income: At the break-even point, fixed costs are covered, so additional units sold increase operating income by the contribution margin per unit., Fixed Costs: Fixed costs per unit (option A) do not change with additional units sold., Variable Costs: Variable costs per unit (option B) remain constant and are deducted from sales price to calculate contribution margin., Gross Margin: Gross margin per unit (option D) includes fixed costs and is less directly relevant than the contribution margin., , ]
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