Contribution Margin Calculator

Contribution Margin Calculator: Assess Profitability

The contribution margin represents the difference between a company's total sales revenue and its variable costs, which are the costs that vary with the level of production or sales. The contribution margin is a critical metric for businesses as it helps assess the profitability of products, services, or business segments. Here's the formula to calculate Revenue:

Contribution Margin = Total Sales Revenue - Total Variable Costs

Total Sales Revenue: The total revenue generated from the sale of products or services.

Total Variable Costs: The sum of all costs that vary with changes in production or sales volume, such as direct materials, direct labor, and variable overhead.