Contribution Margin Calculator

Calculate contribution margin for cost analysis.

Contribution Margin Calculator

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

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Build v1.0.0.305714 • Sep 19, 2025, 02:15 PM EDT

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