How do I calculate Contribution Margin per Unit?
submitted by Hiram Cheap

Soyuz Ranovkin

Subtract the variable costs per unit from the selling price per unit.

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

Contribution Margin/Unit shows how much each unit contributes toward covering fixed costs and making a profit.

Evan Hillman

First off, this is how you find out how much money each product makes after covering the variable costs.

Take the price you sell it for and subtract the variable costs. If you sell a product for $50 and it costs $30 in variable costs, the contribution margin per unit is $20.