Net Profit Margin Calculator
Bottom-line margin.
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Contribution Margin Calculator
Find contribution margin per unit and ratio from price and variable cost.
Contribution margin
—
Ratio of price.
| Per unit | — |
|---|---|
| Price | — |
| Variable cost | — |
| — |
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How the Contribution Margin Calculator Works
Contribution margin is what each sale contributes toward fixed costs and profit after covering its own variable costs. Subtract the variable cost per unit from the price, then divide by the price for the ratio. A $50 product with $30 of variable cost has a $20 contribution margin — a 40% ratio.
It’s the heart of break-even analysis: fixed costs divided by the contribution margin per unit tells you how many units you must sell to break even. A higher contribution margin means each sale does more to cover overhead and build profit.
contribution margin = (price − variable cost) ÷ price
Frequently Asked Questions
How do you calculate contribution margin?
Subtract the variable cost per unit from the selling price. Divide by price for the ratio, or leave it in dollars for the per-unit contribution.
What’s the difference from gross margin?
Gross margin uses all cost of goods; contribution margin uses only variable costs, so it isolates what each extra sale contributes.
Why does contribution margin matter?
It drives break-even and pricing decisions — fixed costs divided by contribution margin per unit gives the units you must sell to break even.
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