The correct answer is Contribution.
Fixed costs are costs that do not change with the level of production. Profit or loss is the difference between revenue and costs. Contribution is the amount of revenue that is left over after paying for variable costs. It is used to calculate break-even point and margin of safety.
Variable costs are costs that change with the level of production. Marginal cost is the change in total cost that results from producing one more unit of output.
Margin of safety is the amount of sales that a company can lose before it starts to incur a loss. Break-even point is the point at which a company’s revenue equals its costs.
Here is a table that summarizes the different concepts:
| Concept | Definition |
|—|—|
| Fixed cost | A cost that does not change with the level of production |
| Variable cost | A cost that changes with the level of production |
| Marginal cost | The change in total cost that results from producing one more unit of output |
| Contribution | The amount of revenue that is left over after paying for variable costs |
| Margin of safety | The amount of sales that a company can lose before it starts to incur a loss |
| Break-even point | The point at which a company’s revenue equals its costs |