Definitions for

**"contribution margin"****Related Terms:**Gross margin, Contribution, Gross profit, Margin, Gross profit margin, Gross revenue, Gross, Break-even analysis, Breakeven analysis, Total cost, Ebitda margin, Gross sales, Cost, Gpm , Revenue requirement, Total costs, Breakeven, Adjusted cost basis, Net sales, Fixed costs, Adjusted capitalized cost, Profit, Break-even point, Break even point, Efficiency ratio, Mtdc, Break-even, Variable expenses, Modified total direct costs, Operating leverage, Production cost, Net revenue, Cost-plus, Net yield, Operating margin, Break even, Average cost, Net, Net capitalized cost, Marginal costing, Marginal cost of capital, Operating profit, Average total cost, Expenses , Fixed cost, Net income, Loss, Breakeven point, Net profit, Marginal cost pricing

Contribution margin is the calculation that gives the profitability of an individual...

The excess of revenues over all variable costs related to a particular sales volume.

The difference between variable revenue and variable cost.

The difference between the price charged to the service customer and the variable costs attributable to each unit of sale; the amount allocated to covering the fixed costs.

The percentage of the selling price that can be used to pay fixed costs. If a product is sold for $1.00 and it costs 70 cents to make the product, 30 cents is the contribution that can be used to pay fixed costs and 30 % or .3 is the contribution margin. 70 cents pays for the variable costs.

The difference between revenue and the associated variable costs. This is an important concept in breakeven analysis.

In foodservice, this is the amount left after the variable cost of an item is subtracted from the menu price. This is regarded as the items contribution to the restaurants fixed costs and profit.

An amount equal to the difference between sales revenue and all variable expenses associated with that sales revenue; net from the variable money flow.

Gross margin less sales and marketing expenses.

Contribution of each unit sold that goes toward paying fixed costs.

Revenue from sales less all variable expenses.

Used to denote the dollar amount that each unit sold will contribute in meeting fixed costs.

The excess of revenue over variable costs and available to cover fixed costs.

A per unit measure of profit margin: contribution ÷unit price, or total contribution ÷revenue.... more on Contribution margin

When pricing a product, the difference between the product's selling price and its variable costs.

This is defined by sales turnover less variable costs. This balance portion of the revenue is then available to cover fixed costs and the excess will contribute to the profit bottomline.

The result of subtracting all variable expenses from revenues. It indicates the amount available from sales to cover the fixed expenses and profit. To Top

Contribution margin analysis is a relatively simple tool afforded by cost/volume/profit analysis. In simplest terms, the contribution margin is total revenue minus total variable cost. This difference can be expressed as a percentage of total revenue.