Contribution margin is the difference between sales revenue and variable costs, which contributes to covering fixed costs and generating profit.

The break-even point occurs when a company’s total costs (fixed + variable) are exactly equal to total revenue, meaning no profit or loss.

Administrative salaries are considered period costs and are not included in the cost of goods sold (COGS), which includes raw materials, direct labor, and factory overhead.

Break-even point (in units) = Fixed Costs / Contribution Margin per unit
= $50,000 / $25 = 2,000 units

Variable costs remain constant per unit of activity but change in total with the level of production or sales, such as raw materials and direct labor.

An activity-based costing (ABC) system assigns overhead costs based on activities (such as number of units produced, machine hours, or setup time), rather than just direct labor or production volume.

Opportunity cost refers to the potential benefit that is lost when one alternative is chosen over another. It's the cost of the next best option foregone.

In a Ponzi scheme, investors often find it difficult to withdraw their funds because the scheme relies on a continuous influx of new capital to stay afloat.

One common technique of window dressing is overstating inventory to inflate assets and improve the company's apparent financial health.

Whistleblowing refers to the act of reporting illegal or unethical behavior in an organization, typically to authorities or regulatory bodies.