Contribution Margin Calculator — Price Minus Variable Cost

Calculate contribution margin and ratio from price and variable cost. Example: price 50, VC 30 → CM 20 (40%). Links to break-even thinking. Educational — not business advice.

How it works

Enter unit price and unit variable cost. Contribution margin is what remains to cover fixed costs and profit.

Formula

CM = P − VC; CM ratio = CM / P. Notes:

Variable cost should move with units; fixed costs belong in break-even analysis.
Price must be > 0.
Taxes and multi-product mixes are not modeled.

Example

Example: price 50, VC 30 → CM = 20; ratio = 20/50 = 40%.

When to use it

Homework: unit contribution before break-even.
See how a VC change moves the ratio.
Pair with the break-even calculator for fixed costs.

Frequently asked questions

Sample result?

P=50, VC=30 → CM 20 and 40%.

CM vs gross margin?

CM uses variable cost; gross margin uses COGS which may include other items.

Need quantity?

Unit CM does not need quantity; total CM = CM × units.

Advice?

Educational only.

Important notice

Educational contribution margin only — not financial, tax, or investment advice.

References: Investopedia and standard textbook formulas.

Questions or feedback

Something unclear, broken, or missing? Draft a message below — we read every note about these tools.