One key to analyzing short-term business decisions is to use a contribution margin approach that separates variable costs from fixed costs.

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Using a contribution margin approach helps in analyzing short-term business decisions by separating variable costs (which vary with the level of production) from fixed costs (which remain the same regardless of the level of production). This separation allows for the calculation of contribution margin, which is the amount of sales revenue that exceeds variable costs and is available to cover fixed costs and generate profits.

One Key to Analyzing Short-Term Business Decisions Is to Use