Which of the following generates the contribution margin Sel

Which of the following generates the contribution margin?

Selling price per unit – fixed cost per unit

Short-term decision making differs from normal operating decision in two ways,          
           which of the following are the two ways?

Solution

1. Selling Price per Unit - Variable Cost per Unit

Contribution per unit is calculated by subtracting all the Variable Cost from the sale Price.

2. Short-term operating decisions are unique and can not be planned.

These Decisions have long-term impact and the decisions on this are taken after proper analysis of various factors. Fixed cost is ignored for these type of decisions i.e. only relevant cost is considered for decision making.