Accounting Concepts and Principles

Definition of Contribution Margin

Contribution margin is a core business concept and is often used in cost accounting to identify the amount of financial contribution a sold product provides to the company.  Simply put, contribution margin is the sales […]

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Accounting Concepts and Principles

What is ‘Cost of Goods Sold’?

Simply put, ‘cost of goods sold’ equals the direct costs of materials, human resources, and equipment needed to produce the item sold.  However, this can be confusing because there are many marginal cost items that affect […]