This is where contribution costing comes in.
Contribution costing
Contribution costing is a financial analysis tool that helps businesses determine the profitability of individual products or activities by focusing on the contribution each makes to covering fixed costs and generating profit.
HL students: Recall how this relates to Cost-to-Make and Cost-to-Buy in topic 5.6.
$$\text{Contribution Margin} = \text{Sales Revenue} - \text{Variable Costs}$$
A bakery sells a pastry for USD 5, and the variable cost (ingredients, packaging) is USD 2. The contribution margin is USD 3 (USD 5 - USD 2).
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Paywall
(on a website) an arrangement whereby access is restricted to users who have paid to subscribe to the site.
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