How this calculator works
Include costs that change with each additional unit in the variable-cost input. Keep fixed costs out of this calculation; they are deducted later when estimating operating profit or break-even volume.
The formula
Contribution = selling price − variable cost. Ratio = contribution / selling price × 100.A quick example
At a selling price of 50 and variable cost of 30, each unit contributes 20, giving a 40% contribution margin ratio.
How to use this calculator
- Choose the settings that match your scenario, using the units shown beside each field.
- Enter selling price per unit, variable cost per unit.
- Calculate, then review the method and assumptions alongside the results.
A few common questions
How does this differ from gross margin?
Contribution separates variable costs from fixed costs, while gross margin uses the accounting COGS figure.
What if variable cost exceeds price?
Contribution is negative: selling another unit increases the loss under the entered assumptions.