What Is the Contribution Margin & How to Calculate It? A Guide
by Kurt Johnson

Whether you sell millions of your products or 10s of your products, these expenses remain the same. Other financial metrics related to the Contribution Margin Ratio include the gross margin ratio, operating margin ratio, and net profit margin ratio. These ratios provide insight into the overall profitability of a business from different perspectives. The contribution […]

Contribution Margin Explained in 200 Words & How to Calculate It
by Kurt Johnson

Management uses the contribution margin in several different forms to production and pricing decisions within the business. This concept is especially helpful to management in calculating the breakeven point for a department or a product line. Management uses this metric to understand what price they are able to charge for a product without losing money […]

Types of Errors in Accounting: A Guide for Small Businesses
by Kurt Johnson

This refers to errors that arise when financial records are not properly organized, stored, or classified. It can lead to missing documents, difficulty in tracing transactions, and improper recording of financial information. A company records a purchase of equipment for $1,000 as $10,000 in the journal. The accounts payable is now overstated by $9,000, and […]