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Contribution Margin Calculator

LAST UPDATE: August 15th, 2018

Calculator

What is a Contribution Margin?

Contribution margin is the value of profit that each unit sold contributes.

It is used to help understand the additional benefit of selling one more unit for the firm.

Formula

Contribution Margin = Price per Unit – Variable Cost per Unit

Example

The latest unit sold will sell for $20 and has a variable cost of $10.

Contribution Margin = $20 – $10 = $10

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