Contribution Margin

Contribution margin (CM) is the quantity by which sales revenue go beyond variable costs. It can be measured as contribution margin per unit as well as total contribution margin, using the following formulas:
Unit CM = Unit Price − Variable Cost per Unit

Contribution Margin Ratio (CM Ratio)

Learning Objectives: Define and explain contribution margin ratio. Calculate CM ratio. What is the importance and benefit of calculating CM ratio? Contribution margin percentage or average  Definition of Contribution Margin Ratio Formula Calculation Importance Review Problems Contribution Margin Ratio Calculator Definition of Contribution Margin Ratio: The contribution margin as a percentage of total