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Contribution Margin


Contribution Margin

Calculating your contribution margin is important when pricing your product. The contribution margin allows you to know how much you will make per unit sold, and allows you to know how low you can price your product for a sale or price reduction.

The formula for calculating your contribution margin percentage is: (Total Revenue – Variable Costs) / Total Revenue. This figure allows a business to know what percentage of their money is available to paying off their fixed costs, such as rent and payroll. Then the leftovers is what the company can deem as profit. Check out our business terms on operating cost and overhead to learn more.

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•   (English) Contribution Margin   •   (Español) Margen de Contribución   •   (Français) Marge de Contribution   •   (Deutsch) Deckungsbeitrag   •   (Italiana) Margine di Contribuzione   •   (Nederlands) Contributiemarge   •   (Português) Margem de Contribuição   •   (עברית) מרווח שוליים   •   (العَرَبِيَّة) هامش المساهمة   •   (हिन्दी) योगदान मार्जिन   •   (ру́сский язы́к) Маржа Вклада   •   (Dansk) Bidragsmargin   •   (Svenska) Bidragsmarginal   •   (Suomi) Rahoitusmarginaali   •   (Norsk) Dekningsbidrag   •   (Türkçe) Katkı Payı   •   (Polski) Wkład Margin   •   (Româna) Marja de Contribuție   •   (Ceština) Marže Příspěvku   •   (Slovenský) Príspevok na Úhradu   •   (Magyar) Hozzájárulás   •   (Hrvatski) Granica Doprinosa   •   (български) Марж на Приноса   •   (Lietuvos) Įnašo Marža   •   (Slovenščina) Prispevek za Kritje   •   (Latvijas) Iemaksu Peļņa   •   (eesti) Toetuse Marginaal