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Is gross profit comparable to contribution margin?

Accounting Cost Accounting Financial Accounting Financial Management managerial accounting
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Question ajoutée par VENKITARAMAN KRISHNA MOORTHY VRINDAVAN , Project Execution Manager & Accounts Manager , ALI INTERNATIONAL TRADING EST.
Date de publication: 2014/12/03
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Ednalyn Banuelos, CMA
par Ednalyn Banuelos, CMA , Projects Accountant , Grade Ref., LLC

Its different. Gross profit (Sales Revenue - Cost of Goods Sold); It is the amount available to cover the company's operating expenses. Contribution Margin (Sales Revenue - variable costs); it is the amount available to cover fixed costs.

Haris Yaqub
par Haris Yaqub , Assistant General Manager Accounts and finance , Chenone stores ltd

SALES REVENUE - ( DIRECT MATERIAL+ DIRECT LABOR + VARIABLE FACTORY OVERHEADS) = CONTRIBUTION MARGIN,        I.E  MARGIN  TO MEET THE FIXED EXPENSES

Lesley Lanag CMA CPA
par Lesley Lanag CMA CPA , Senior Accountant , Takaful Emarat Insurance (P.S.C)

Gross profit (GP) is different from Contribution margin (CM).

GP is the difference between Sales and Cost of Sales under Absorption costing/full costing while CM is the difference between Sales and Variable manufacturing costs under  Variable costing. The difference results from different treatment of fixed manufacturing cost under both costing method.

Vinod Jetley
par Vinod Jetley , Assistant General Manager , State Bank of India

No.

MALIIK SOHAIL ABBAS
par MALIIK SOHAIL ABBAS , ACCOUNTS MANAGER , AL RAWDAH GREEN SWEET WATER

NO The basic difference B/W

G.P = SALES -CGS

CM= REVENUE - V .MANUFACTURING COST

TREATMENT IS DIFFERENT

Mohammed Aneez Kunhirithiri
par Mohammed Aneez Kunhirithiri , Chief Accountant , Ecocon Industries LLC

No....

Both are difference in every sense 

If you compare both and make a decision on the basis of it, it will lead to trouble 

Alex Al Yazouri
par Alex Al Yazouri , General Manager , Al Mushref Cooperative Society

No Sir GP and CM are totally different.

Ahmed kandil
par Ahmed kandil , Cost Controller , Battour Holding Cpompany

contribution margin = sales minus variable cost 

gross margin = sales - COGS ( both fixed and ( variable ) 

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