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Contribution Margin and Gross Profit Difference

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Contribution margin is a very important metric that looks at the profitability of a company. When looking at contribution margin, how is it comparable to gross profit? Also explain the importance of contribution margin.

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This solution helps to find out the difference between gross profit and contribution margin.

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Hi,

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Jayant Kumar

Answer:
Gross profit is the profit measured by subtracting direct production cost from revenue. Gross profit in ...

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  • MBA, Indian Institute of Finance
  • Bsc, Madras University
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