The part of each sale left to cover fixed costs and make a profit.
MC% = (P − CV) ÷ P
What each letter means
- P: Price per unit
- CV: Variable cost per unit
An example
With P = €50, CV = €30: Contribution margin = 40%.
The part of each sale left to cover fixed costs and make a profit.
With P = €50, CV = €30: Contribution margin = 40%.