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1)Gross Profit Margin = total sales revenue - total direct costs of goods sold
2)Contribution Margin = (revenue from sales of an item - production costs for the item ) ÷ revenue from sales of the item
The contributin margin does not consider the closing stock its purely the profit derived from sales of the product .
calculated as Contribution margin per unit=(SPPU-VCPU)/SPPU
where sppu =selling price per unit
VCPU =variable cost per unit.
