Not-for-profit institutions and CVP This application of CVP in a not-for-profit setting is particularly interesting for two reasons. First, the effect of budget cuts on government agencies is topical, given the current political climate that emphasises reducing spending on social programmes. Second, the not-for-profit sector constitutes an increasing proportion of the economy. There are two distinctions between CM and GM. Variable non-manufacturing expenses are subtracted to get CM (but not GM, and fixed manufacturing costs are subtracted to get GM (but not CM e.g.: Selling price/case €15.00 Variable manufacturing cost/case 2.00 Variable mktg. and admin. cost/case 4.00 Fixed manufacturing cost/case 4.50 Fixed mktg. and admin. cost/case 1.50 CM = €15 − 2 − 4 = €9 GM = €15 − 2 − 4.5 = €8.50
