what is term contribution?

Answer 1

Your question is not very explicit but as a chartered accountant (ACCA) I recognise the term contribution as meaning the contribution which net profit (ie. sale price less variable cost) makes towards covering overheads (ie. fixed costs).

In this sense variable costs are those costs which alter with the level of activity such as material costs whereas fixed costs are those costs which are there even if no activity takes place, such as rent and salaries.