By The Finance Storyteller on youtube.com
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In this step you'll learn about commercial margin and profitability. Commercial margin is about the contribution margin per unit in the total revenue produced and sold. Profitability is about the ability of a company to generate a profit from the revenue it generates.
Fix costs, such as labour, materials, and electricity, are also used to make a unit and are typically categorized into two categories: variable costs and fixed costs. Variable costs are typically more valuable than expected, while fixed costs are typically more expensive than expected.
In this context, profitability is determined by the contribution margin per unit, which is the difference between the total revenue and total costs associated with producing and selling a unit of product. Additionally, profitability can be affected by the number of units sold, the cost of materials and labour, and other factors.
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