CONTRIBUTION MARGIN ANALYSIS Definition

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CONTRIBUTION MARGIN ANALYSIS is a technique used in brand marketing and product management to help a company decide what product(s) to add to its product portfolio. The manager asks what will happen to profits if a new product is added or an existing product is discontinued. Calculations take into account additional revenues, additional costs, effects on other products in the portfolio (referred to as cannibalization), and competitors reactions.

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APPLICATION RATE, OVERHEAD is a rate used to apply manufacturing overhead to output; estimated factory overhead for a period divided by the estimated application base.

UNIT-CONTROL SYSTEM is an accounting system used in inventory management that tracks inventory using bin tickets and physical inventory checks.

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