ECR - Contribution

System
System Posts: 100,534 🤖 Admin 🤖
edited June 18 in AAT student discussion
Hello, I am due to sit my exam in Dec and i am still not too sure as to what contribution is exactly. There are so many ways to calculate it and I am getting confused. Please could someone enlighten me as to what it is and any easy methods of remembering the formulas??<BR><BR>Thank you<BR><BR>(very confused) part time student

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  • System
    System Posts: 100,534 🤖 Admin 🤖
    ECR - Contribution

    Hi<BR><BR>Contribution is your sales less your variable cost of sales= sales - direct labour, material, overheads, variable selling costs.<BR><BR>PM
  • System
    System Posts: 100,534 🤖 Admin 🤖
    ECR - Contribution

    as above so you contribution is usually fixed cost and profit in that figure, a common exam question usually comes up with this and they then giveyou the total contribution and the fixed overheads and then ask you to work out the profit.
  • System
    System Posts: 100,534 🤖 Admin 🤖
    ECR - Contribution

    Thank you, that was a great help! I understand now.<BR><BR><img src="i/expressions/face-icon-small-happy.gif" border="0">

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