How do I calculate the contribution margin?
submitted by Dave

ronny

Take your total sales and subtract the variable expenses. The leftover is your contribution margin.

It's a "contribution" margin because it helps cover fixed costs and then contributes to profit.

kinder than mold

Subtract variable costs from your sales revenue.

Contribution Margin = Sales Revenue - Variable Costs.

That's how much money is left over to cover fixed costs and generate profit.