Formula
Contribution margin = Sales − Variable costs. Ratio = Contribution margin ÷ Sales × 100.
Calculate contribution margin and contribution margin ratio for break-even and operating planning.
Subtract variable costs from sales to find the amount available to cover fixed costs.
Contribution margin = Sales − Variable costs. Ratio = Contribution margin ÷ Sales × 100.Calculate contribution margin and contribution margin ratio for break-even and operating planning.
Contribution margin = Sales − Variable costs. Ratio = Contribution margin ÷ Sales × 100.
Subtract variable costs from sales to find the amount available to cover fixed costs.