Contribution Margin Calculator
Enter the price, variable cost per unit, units sold and fixed costs.
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Contribution Margin Calculator by TheCalcTools
How the Contribution Margin Calculator works
Contribution margin is what each sale contributes toward fixed costs and profit after variable costs. Once total contribution covers fixed costs, every extra unit adds its full margin to profit.
The ratio shows how much of each dollar of revenue is contribution, which helps compare products and plan prices.
The formula
Worked example
Using the default values shown in the calculator:
| Selling price per unit | $50 |
|---|---|
| Variable cost per unit | $30 |
| Units sold | 8000 |
| Fixed costs for the period | $120000 |
- 50 − 30 = $20.00 per unit (40.0%).
- 8,000 units contribute $160,000, leaving $40,000 after fixed costs. Break-even: 6,000 units.
Result:
| Contribution margin per unit | $20.00 |
|---|---|
| Contribution margin ratio | 40.0% |
| Total contribution | $160,000 |
| Operating profit | $40,000 |
| Break-even units | 6,000 |
| Break-even revenue | $300,000 |
Frequently asked questions
Contribution margin or gross margin?
Gross margin subtracts cost of goods sold, which can include some fixed production costs. Contribution margin uses only variable costs.
Sources and further reading
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This calculator gives estimates for information only. Check important results independently before you rely on them. See our disclaimer.