40 per unit on a 100 price
- Price per unit
- $100.00
- Variable cost per unit
- $60.00
- Units sold
- 1,000
Contribution per unit$40.00
arithmetic identity
Open this exampleBusinesspricing
Contribution Margin Calculator
What each unit contributes toward fixed costs once its own variable cost is paid. This is the number that decides whether selling more helps or hurts.
Also called: contribution per unit calculator, variable cost margin.
Contribution per unit
$40.00
Each unit contributes $40.00 towards fixed costs. A contribution margin of 40%. Across 1,000 units that is $40,000.00.
Contribution margin
40%
Total contribution
$40,000.00
Method and background
How this is calculated
Price minus variable cost. If it is positive, every additional unit moves you closer to covering fixed costs; if it is negative, every additional unit deepens the loss and volume is the wrong lever entirely.
cm = price - variable_cost; cm_pct = (price - variable_cost)/price * 100- p
- Price per unit (currency)
- v
- Variable cost per unit (currency)
Worked examples
Each of these is asserted on every build. If a change to the engine ever moved one of these answers, the build would fail before the page could print it.
selling below variable cost
- Price per unit
- $50.00
- Variable cost per unit
- $60.00
- Units sold
- 100
Contribution per unit-$10.00
boundary: negative contribution means volume makes it worse
Open this examplezero price
- Price per unit
- $0.00
- Variable cost per unit
- $10.00
- Units sold
- 10
Contribution per unit-$10.00
degenerate case: guarded division
Open this example