Contribution Margin
Finance
Contribution Margin
Revenue minus variable costs; contribution available to cover fixed costs and profit.
Examples
- 01A pump sells for EUR 300 with variable costs of EUR 180, leaving a contribution margin of EUR 120 per unit.
- 02Sales and operations review the contribution margin of each product family monthly to decide where capacity should go first.
- 03When the bottleneck is fully loaded, the team ranks products by contribution margin per bottleneck minute, not per unit.