Contribution Margin Calculator online

Contribution Margin Calculator

Contribution Margin Calculator

Contribution Margin (%) Equal to selling price per unit (INR) multiple number of units (INR) less than variable costs per unit (INR)  multiple number of units .  contribution margin is the difference between the sales revenue and the variable costs of a product.

The formula us,

Contribution Margin = (Selling Price per Unit * Number of Units) – (Variable Costs per Unit * Number of Units)

Calculate the Contribution Margin

Let’s say we have a company that produces 200,000 units of a product, sells them at $12 per unit and has a variable costs of $7 per unit.

Contribution Margin = (Selling Price per Unit * Number of Units) – (Variable Costs per Unit * Number of Units)

Contribution Margin = ($12 * 200,000) – ($7 * 100,000) = $24,00,000 – $700,000 = $17,00,000

The answer the Contribution Margin ratio

Contribution Margin Ratio = $1700,000 / ($12 * 200,000) = $400,000 / $24,00,000

= 70.83% 

 

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