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Contribution Per Unit

Contribution per unit (CPU) is a metric that measures the amount of profit that a company generates from each unit of a product that it sells.

It's calculated by subtracting the variable costs of producing and selling a unit from the revenue that the unit generates. Variable costs include things like materials, labor, and distribution costs that vary with the number of units sold.

The formula for calculating CPU is: CPU = revenue per unit - variable costs per unit. For example, if a company sells a product for $100 and the variable costs of producing and selling that product are $50, the contribution per unit would be $50.

The higher the CPU, the more profitable the product is for the company.

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