Calculate contribution margin in rupees and contribution margin percentage from revenue and variable costs.
Result
Calculated as Revenue minus Variable Costs.
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Contribution Margin = Revenue - Variable Costs | CM Ratio = CM / Revenue
Sales revenue ₹5,00,000, Variable costs ₹2,20,000.
Contribution Margin: ₹2,80,000 | CM Ratio: 56.00%.
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Open calculatorContribution margin measures the remaining revenue after deducting variable manufacturing and delivery costs. This residual surplus contributes to paying fixed overheads like rent and executive salaries.
Unlike gross profit (which deducts fixed manufacturing overheads), contribution margin isolates purely variable expenses to reveal how incremental sales directly boost net profitability.