Contribution Margin Calculator
See how much each sale contributes towards fixed costs and profit.
How do I calculate margin?
Contribution margin is the selling price minus the variable cost per unit, and the margin percentage is that figure divided by the price.
Formula: Contribution margin per unit = Price − Variable cost per unit; Contribution margin ratio = Contribution margin per unit ÷ Price; Total contribution = Contribution per unit × Units
What this calculator does
The part of each sale left after the variable cost of making it. Direct subtraction and division of the entered price and cost.
Use it to turn Currency, Selling price per unit, Variable cost per unit, Units sold (optional), and the other shown inputs into a checked result you can compare, copy, or rerun with different assumptions.
The page shows the formula, a numeric worked example, and the assumptions that affect this professional & industry calculation.
Inputs and what they mean
- Currency
- — Amounts are shown in the currency you pick. No exchange rate is applied..
- Selling price per unit
- — number value.
- Variable cost per unit
- — number value.
- Units sold (optional)
- — number value.
- Fixed costs (optional)
- — number value.
How to use it
- Enter your own figures — the calculator never fills in a rate, price or benchmark for you.
- Press Calculate to see the result.
- Read the formula, variables, assumptions and source below the result before you rely on it.
Formula
Contribution margin per unit = Price − Variable cost per unit; Contribution margin ratio = Contribution margin per unit ÷ Price; Total contribution = Contribution per unit × Units.
Inputs used: Currency, Selling price per unit, Variable cost per unit, Units sold (optional), Fixed costs (optional).
Edge handling: Selling price per unit is required.; Selling price per unit must be greater than zero.; Selling price per unit must be no more than 1000000000000.; Variable cost per unit is required.; Variable cost per unit cannot be negative..
Worked example
$50 price with $20 of variable cost
- Start with Currency: USD, Selling price per unit: 50, Variable cost per unit: 20, Units sold (optional): 1000, Fixed costs (optional): 10000.
- Apply the method: Contribution margin per unit = Price − Variable cost per unit; Contribution margin ratio = Contribution margin per unit ÷ Price; Total contribution = Contribution per unit × Units.
- Each sale contributes $30 towards fixed costs and profit.
Reading the result
The headline figure is the main answer. Any breakdown underneath shows the parts that make it up, so you can check the working and see what changes when you adjust an input.
Limitations and assumptions
- Inputs outside the supported range are rejected rather than forced into a result.
- The result depends on the values you enter for this contribution margin calculator; it does not supply missing rates, rules, prices, dates, or assumptions for you.
Reference: OpenStax — Principles of Accounting, Volume 2: Managerial Accounting
Last reviewed:
Common questions
How do I calculate margin?
Contribution margin is the selling price minus the variable cost per unit, and the margin percentage is that figure divided by the price. Check the formula, example, and limitations on this page before using the result for a real professional & industry decision.
Where does this formula come from?
OpenStax, Principles of Accounting Volume 2: Managerial Accounting, contribution margin. See the source link on this page.
What kind of calculation is this?
The part of each sale left after the variable cost of making it. Check the formula, example, and limitations on this page before using the result for a real professional & industry decision.
What are its limits?
Contribution is not profit: fixed costs still have to be covered. Check the formula, example, and limitations on this page before using the result for a real professional & industry decision.
How do I use the Contribution Margin Calculator?
Enter the required values for Currency, Selling price per unit, Variable cost per unit, Units sold (optional), Fixed costs (optional). The calculator applies the formula on this page and shows the main result with any supporting breakdown so you can check the arithmetic.
What formula does the Contribution Margin Calculator use?
Contribution margin per unit = Price − Variable cost per unit; Contribution margin ratio = Contribution margin per unit ÷ Price; Total contribution = Contribution per unit × Units The visible formula section above lists the calculation path and the edge cases the page handles, so the result can be checked without relying on the form alone. Check the formula, example, and limitations on this page before using the result for a real professional & industry decision.
Formula, source and verification
The part of each sale left after the variable cost of making it.
The question it answers: How much of each sale is left to cover fixed costs and profit?
The formula
Contribution margin per unit = Price − Variable cost per unit; Contribution margin ratio = Contribution margin per unit ÷ Price; Total contribution = Contribution per unit × Units
- P — Selling price per unit
- (currency). Price charged.
- V — Variable cost per unit
- (currency). Cost that varies with each unit.
- Q — Units sold
- (count). Optional volume, to show total contribution.
- F — Fixed costs
- (currency). Optional, to show operating profit at that volume.
Units: Currency per unit; ratio as a percentage.
What kind of calculation this is
Deterministic formula. The same inputs always give the same answer. The maths is fixed and does not depend on judgement.
Method
Direct subtraction and division of the entered price and cost.
Published alternatives
More than one published form of this calculation exists. Each one assumes something different, so the right one depends on your situation.
Contribution margin per unit (used by default)
CM = Price − Variable cost per unit
Use it when: Use for a single product.
It assumes: Variable cost per unit is constant over the range considered.
Contribution margin ratio
CM ratio = (Price − Variable cost) ÷ Price
Use it when: Use to compare products of different prices, or for a mix.
It assumes: Variable cost per unit is constant over the range considered.
Assumptions built into the result
- Business: Variable cost per unit is constant over the volume considered.
Figures this calculator will never guess for you
- No benchmark margin is offered as a target.
Limitations
- Contribution is not profit: fixed costs still have to be covered.
Source and version
- Standard or reference
- Contribution margin (OpenStax, Principles of Accounting Volume 2: Managerial Accounting, contribution margin.)
- Published source
- OpenStax — OpenStax (CC BY)
- Formula version
- Version 1
- Verification
- Reviewed against the cited source on
- How much weight the source carries
- Academic
- Applies to
- Currency
- Amounts stay in the currency you choose; no exchange rate is applied.
Cite this page
Free Calculator. (2026, September 15). Contribution Margin Calculator. https://freecalculator.tech/tools/contribution-margin-calculator
"Contribution Margin Calculator." Free Calculator, 15 Sept. 2026, https://freecalculator.tech/tools/contribution-margin-calculator.
Contribution Margin Calculator — Free Calculator, https://freecalculator.tech/tools/contribution-margin-calculator
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