Line items decides what drives revenue and cost in the system. They are created in Advertisers / Advertisers / Line Items.
You can either specify only what drives revenue, and cost will be automatically decided from the Default Cost (%) setting on the Site. Or you can specify also what drives cost. You can have either a CPM, CPC or hybrid model.
Example: Setting CPM Revenue: 2 EUR will cause revenue to be computed from the impressions generated at a CPM of 2 EUR. If the site delivering this has as cost of 70 %, cost will be 0.7*2 EUR CPM.
Cost will always be the media cost + Bidtheatre fees. Revenue is then usually specified in terms of this cost by using the Profit Margin and Agency Margin fields of the line item. But there is nothing preventing you from specifying a fixed CPM or CPC revenue, this could however mean that
you take on some risk.