Contribution Margin Calculator

Total Revenue ($)

Variable Costs ($)

Units Sold (Optional)

Selling Price per Unit ($) (Optional)

Results

Contribution Margin ($)

Contribution Margin Ratio

Contribution Margin per Unit

Variable Cost Ratio

Calculation Breakdown

Total Revenue:

Variable Costs:

Contribution Margin:

Revenue Breakdown

Contribution Margin

Variable Costs

Understanding Contribution Margin

Key Concepts

Contribution Margin: The amount remaining from sales revenue after variable costs are subtracted. This contributes to covering fixed costs and generating profit.

Variable Costs: Costs that change directly with the level of production or sales volume (materials, direct labor, sales commissions).

Contribution Margin Ratio: The percentage of each sales dollar available to cover fixed costs and profit.

Formulas Used

Contribution Margin = Revenue - Variable Costs

Contribution Margin Ratio = (Contribution Margin ÷ Revenue) × 100

Contribution Margin per Unit = Selling Price - Variable Cost per Unit

Variable Cost Ratio = (Variable Costs ÷ Revenue) × 100

Applications

Pricing decisions and product profitability analysis
Break-even analysis and sales target setting
Product mix optimization
Cost-volume-profit analysis
Make-or-buy decisions
Performance evaluation and budgeting

Contribution Margin Calculator