Contribution Margin
CM = Revenue − Variable Costs. CM ratio = CM / Revenue.
Result
CM per unit
$40.00
Total CM: $40,000 (40.0% of revenue).
- Price / unit$100
- Variable cost / unit$60
- CM / unit$40.00
- Units sold1000
- Revenue$100,000
- Total CM$40,000
- CM ratio40.00%
Step-by-step
- CM per unit = price − variable cost = 100 − 60 = $40.00.
- Total CM = CM × units = 40.00 × 1000 = $40,000.
How to use this calculator
- Enter price + variable cost + units.
About this calculator
Contribution margin = revenue minus variable costs (vs. gross margin which uses COGS). CM is what each unit "contributes" toward fixed costs + profit. Used for break-even analysis, product mix decisions, special-order pricing. CM > 0 = each sale helps. CM < 0 = each sale loses money (stop selling). 80% CM ratio (typical SaaS) is enviable. 30% CM ratio (typical manufacturing) requires high volume.
Frequently asked
CM uses variable costs (changes with units). GM uses COGS (broader — may include some fixed overhead). For pricing decisions, CM more useful.
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