What is contribution margin in SAP SRD-FIN-COR - FIN-Cost and Revenue?

SAP Term: contribution margin

• Component: SRD-FIN-COR

• Component Name: FIN-Cost and Revenue

• Description: The difference between sales revenue and variable cost. Contribution margins are calculated for market segments and are needed in decision making.

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• Key Concepts: 
  Contribution margin is a measure of profitability used in cost-volume-profit (CVP) analysis. It is calculated by subtracting the total variable costs from the total sales revenue. It is used to determine the break-even point and to analyze the profitability of different products or services. In SAP, contribution margin is used in the SRD-FIN-COR FIN-Cost and Revenue Accounting component to analyze the profitability of different products or services. 
  
  How to use it: 
  In SAP, contribution margin can be calculated by entering the total sales revenue and total variable costs into the SRD-FIN-COR FIN-Cost and Revenue Accounting component. The contribution margin will then be calculated automatically. This can be used to analyze the profitability of different products or services. 
  
  Tips & Tricks: 
  When calculating contribution margin in SAP, it is important to ensure that all relevant costs are included in the calculation. This includes both fixed and variable costs. Additionally, it is important to ensure that all sales revenue is included in the calculation as well. 
  
  Related Information: 
  Contribution margin can be used in conjunction with other measures of profitability such as gross profit margin and net profit margin. Additionally, it can be used to analyze the profitability of different products or services within a company.