Before contribution can be calculated,fixed costs and variable costs have to be separated

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To calculate contribution, it is essential to differentiate between fixed costs (which remain constant regardless of the level of output) and variable costs (which increase or decrease proportionately with the level of output). By separating fixed and variable costs, we can determine how much revenue is available to cover fixed costs and contribute towards profits.

Before Contribution Can Be Calculated,fixed Costs and Variable Costs Have