Contribution Margin Calculator
Enter the selling price and variable cost per unit to see your contribution per unit, the total contribution and the margin ratio — so you can check whether a product covers its fixed costs and starts earning profit.
How to use
- Fill in the fields above with your own figures — results update live as you type.
- Contribution is selling price minus variable cost per unit. Total contribution must cover fixed costs before profit starts.
- Check the result box and adjust any rate or parameter to test other cases.
Note: Only costs that change with each unit belong in variable cost — rent and salaries are usually fixed.
Tips
- Only costs that change per unit go in variable cost — rent and salaries are fixed.
- A positive contribution per unit means each sale helps cover fixed costs.
- Compare the margin ratio across products to see which earns most per rupee of sales.
- Use the result to set break-even targets for the month.
Frequently Asked Questions (FAQ)
What does the Contribution Margin Calculator calculate?
Per unit and total contribution margin after variable costs, plus the contribution margin ratio.
What counts as a variable cost?
Only costs that change with each unit — rent and salaries are usually fixed.
Does it use the fixed costs I enter?
Yes. Fixed costs are subtracted from the total contribution, so you can see whether a product covers them and starts earning profit.
What is the contribution margin ratio?
The contribution per unit divided by the selling price, shown as a percent. It tells you how much of each sale is left after variable costs.
What does a negative contribution margin mean?
The selling price does not even cover the variable cost of each unit, so the product loses money on every sale before fixed costs are counted.