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Ca’ Foscari University of Venice, Venice, Italy


The analysis of company data useful for economic decisions, if not interpreted in an overall view of the company situation, can lead to wrong conclusions. This is the case when a company has to choose between several sales  options for one or more products in the presence of a limiting factor. The continuation of the investigation often denies the initial analysis. Not everything is as it appears, therefore, at the beginning of the deepening of the      data useful for economic decisions. As it is well known, the choices of profitability concerning the planning of the sale of company products take place, at least in the majority of cases, through the determination of the contribution margin, i.e. the profitability margin connected to the individual goods/services sold by the companies (selling    price net of variable costs). The contribution margin can be determined with four objectives: (1) Determination of the yield of the single product, net of variable costs only. In this case, the margin defines unitary, from net     product yield to unitary contribution margin. (2) Determination of the return on total sales of an individual product, net of variable costs. In this hypothesis, reference is made to the first level (or gross) contribution margin. (3) Determination of the ability of the individual product to contribute to the coverage of fixed costs common to the company. This margin is determined net of special product variable and fixed costs. This aggregate is defined as a Level II (or semi-gross) margin. (4) Determination of the useful value in the planning choices in case of presence  of scarce productive factors. In this case, it must identify the so-called unitary margin for low factor. Here we will only deal with the problem of the use of the contribution margin in the presence of rare factors. To complete the analysis, below are some very brief considerations regarding, respectively, the unitary, level I, and level II contribution margin in order to better understand where the problem of the most convenient choice of income is located in the event of the presence of rare production factors, especially in an environment characterized by a plurality of sales options.


contribution margin, unit contribution margin, first level contribution margin, second level contribution margin, Unit Scarce factor contribution margin, Unit Scarce factor contribution margin in the presence of a plurality of sales options, profit

Cite this paper

Journal of Modern Accounting and Auditing, Jan.-Feb. 2023, Vol. 19, No. 1, 1-22, doi: 10.17265/1548-6583/2023.01.001.


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