Final answer:
The statement regarding product contribution being a measure of profitability that accounts for sales revenue, COGS, inventory costs, and marketing is true. It aids in determining the accounting profit and understanding each product's financial contribution.
Step-by-step explanation:
That product contribution:
The statement that product contribution is a measure of how profitable each of your products was last year, factoring in wholesale sales revenue, cost of goods sold (COGS), inventory costs, and product marketing, is true. Product contribution helps in evaluating the profitability of individual products by subtracting the variable costs, such as COGS and marketing, from the sales revenue of each product.
Revenue is the income from selling a firm's products, which is calculated as the product's price multiplied by the quantity sold. The total cost includes both fixed and variable costs incurred in the production and selling of the products. Understanding the short-run and long-run costs, which differ due to the variability of inputs over different time periods, is critical for evaluating the profitability (Key Terms: accounting profit, average total cost, average variable cost).