As a business owner it is important to understand not only how much revenue you are making but also the profit that is being realized. Part of this process is to understand contribution margin, break-even point and operating income.
This assignment has 4 parts:
- What is taken into consideration to figure out the contribution margin?
- How is the break-even point determined?
- What is needed to determine the operating income?
- Would the contribution margin, break-even point and operating income change if the compensation method for employees is modified?