CONTRIBUTION MARGIN Definition

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CONTRIBUTION MARGIN (CM) is the difference between sales and the variable costs of the product or service, also called marginal income. It is the amount of money available to cover fixed costs and generate profits.

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COST OVERRUN is the amount by which an entity exceeds or expects to exceed the estimated cost to completion of: a. a product; b. a process; or, c. the final limitations of costs stipulated in a contract.

MARKET RISK is the risk of price fluctuations resulting from general market conditions such as changes in the level of interest rates.

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