Assignment:
Cost, Volume, Profit Analysis
Continuing the scenario:
Identify and classify the fixed and variable manufacturing costs for producing your product.
Describe what contribution margin means and how you would calculate it for your division.
What types of decisions could you make using the contribution margin? Give specific examples of how you might use the contribution margin to make decisions about product pricing, acceptance of special orders, increasing or decreasing component costs, or incurring additional advertising expenses.