Contribution can be seen either as part of a discussion on marginal costing OR as a key part of short term decision making. Contribution can be seen either as part of a discussion on marginal costing OR as a key part of short term decision making.
For example,a company manufactures only one product called XY. The following information relates to the product :
Fixed costs for the period are $25,000.
The following table can be presented :
The table illustrates that contribution per unit remains constant at all levels of activity. However, profit per unit changes. Hence, marginal costing is a useful method when trying to analyse and manage costs. Absorption costing does not distinguish between fixed and variable cost elements. It is not a useful method for internal reporting.
Short term decisions
Short term decisions have two characteristics that make them considerably simpler than longer term ones:
- The time value of money can be ignored
- Most fixed costs will be incurred anyway so can be ignored as not relevant
In such cases the main approach is usually to consider relevant cash flows, which may simplify to looking at the impact of the decision on the total contribution.
Methods here include:
| Created at 6/1/2012 8:36 AM by System Account (GMT) Greenwich Mean Time : Dublin, Edinburgh, Lisbon, London |
Last modified at 9/26/2013 2:41 PM by System Account (GMT) Greenwich Mean Time : Dublin, Edinburgh, Lisbon, London
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FAQs
: the giving or supplying of something (such as money or time) as a part or share. They're collecting donations for contribution to the scholarship fund.
What is an example of a contribution? ›
a : something that is given to help a person, a cause, etc. She made a 100-dollar contribution [=donation] to breast cancer research. They thanked him for his contribution of time and money. He made an important contribution to the debate.
What is the synonym of contribution? ›
addition donation grant improvement increase input. Strong matches. alms augmentation benefaction beneficence bestowal charity handout present subscription supplement.
What is contribution in simple terms? ›
Meaning of contribution in English. something that you contribute or do to help produce or achieve something together with other people, or to help make something successful: All contributions (= presents of money), no matter how small, will be much appreciated.
How do you explain contribution? ›
noun
- the act of contributing.
- something contributed. Synonyms: benefaction, donation, gift.
- an article, story, drawing, etc., furnished to a magazine or other publication.
- an impost or levy.
- Insurance. the method of distributing liability, in case of loss, among several insurers whose policies attach to the same risk.
, con·trib·ut·ed, con·trib·ut·ing. to give (money, time, knowledge, assistance, etc.) to a common supply, fund, etc., as for charitable purposes. Synonyms: donate, furnish, provide. to furnish (an original written work, drawing, etc.)
How do you describe contribution? ›
/kɒntrɪˈbjuʃən/ When you make a contribution, it means you're giving something away — whether it's your money, your possessions, or your time. A contribution can take many forms. Some contributions are measurable, like a $10 donation to the Salvation Army.
What are good contributions? ›
Positive contributions are the intentional efforts your employees make to create a better company for themselves, their colleagues, and stakeholders. This could take the form of influencing a stronger culture, improving productivity, or spurring innovation.
Is contribution a good thing? ›
Contributing can help us earn the respect and appreciation of our peers, and can help us develop a sense of meaning and purpose in our own lives. Opportunities to make meaningful contributions support our own positive development as adolescents while helping our friends, family members, social groups, or communities.
What is another word for contribute? ›
contribute (verb as in donate, provide) Strongest matches. add commit devote give grant pony up share subsidize supply. Strong matches. accord afford assign bequeath bestow confer dispense dower endow enrich furnish present proffer sacrifice subscribe tender will.
Instead of using "Contribute," job seekers can use synonyms like "Achieved," "Delivered," or "Generated" to emphasize their ability to drive results.
What do you call someone who contributes? ›
/kənˈtrɪbjətə/ IPA guide. Other forms: contributors. A contributor is someone who takes part in something or makes a contribution. Writers and people who donate money in particular are called contributors.
What is a defined contribution in simple terms? ›
Defined Contribution Plan is a retirement plan in which the employee and/or the employer contribute to the employee's individual account under the plan. The amount in the account at distribution includes the contributions and investment gains or losses, minus any investment and administrative fees.
How do you explain your contributions? ›
The best way to answer questions about your contributions to the company is to give examples of what you have accomplished in the past and relate them to what you can achieve in the future. Always personalise your responses.
What is simple contributions? ›
A SIMPLE IRA plan provides small employers with a simplified method to contribute toward their employees' and their own retirement savings. Employees may choose to make salary reduction contributions and the employer is required to make either matching or nonelective contributions.
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