Contribution Margin Ratio
Free Contribution Margin Ratio calculator with clear step-by-step results.
About Contribution Margin Ratio
Contribution margin shows what each sale contributes toward fixed costs and profit.
Formula
Formula
Contribution = price − variable cost; ratio = contribution ÷ price
Worked example
With the default values below, Contribution Margin Ratio returns Contribution per Unit of $10.00. Change any input above and every figure here is recalculated in your browser.
Inputs used
- Selling price per unitminimum 0 $
- 25 $
- Variable cost per unitminimum 0 $
- 15 $
Results
- Contribution per Unit
- $10.00
- Contribution Margin Ratio
- 40.00%
- Units to Cover $1,000 Fixed Cost
- 100.0
Step by step
- 1Values used
- 2Formula
- 3Contribution per Unit= $10.00
- 4Contribution Margin Ratio= 40.00
- 5Units to Cover $1,000 Fixed Cost= 100.0
Assumptions and limits
- The result is derived only from the 2 inputs listed above. Anything not among them is not part of the calculation.
- In particular, this calculator does not take inflation, tax or compounding frequency into account.
- Figures are rounded for display to 2 decimal places, so totals built from several rounded parts can differ slightly from the unrounded arithmetic.
- This is an estimate for general information and not professional financial, tax or legal advice. See the full disclaimer for the limits that apply to this kind of calculator.
How these calculators are built and tested is described on the Methodology page. If a figure looks wrong, please report it.
Frequently Asked Questions
How does this calculator work?
Contribution margin shows what each sale contributes toward fixed costs and profit.
Why does this matter?
Only variable costs are removed to get contribution.