Contribution margin is the value of profit that each unit sold contributes.
Contribution Margin = Price per Unit – Variable Cost per Unit
- Accounting Tools – Contribution Margin – A quick overview of the concept of contribution margin with an example calculation.
- Wikipedia – Contribution Margin – Formulas, explanations, and examples of what the contribution margin is.
- Investopedia – Contribution Margin – An encyclopedic entry on the contribution margin metric.
- The Balance SMB – What is the contribution margin? – A simple explanation of the contribution margin with some examples.
- HubSpot Blog – Contribution Margin Explained in 200 Words (and how to calculate it) – A quick explanation of contribution margin.