Contribution Margin Calculator
What each unit adds to profit.
Calculate contribution margin per unit and total profit. Enter price per unit and variable cost per unit for an instant result.
What this tool does
This tool calculates contribution margin per unit, total contribution, and net profit.
Enter Values
Formula Used
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Disclaimer
Results are estimates for educational purposes only. They do not constitute financial advice. Consult a qualified professional before making financial decisions.
Contribution margin = revenue per unit minus variable cost per unit. It's what each sale contributes toward fixed costs. Higher margin = better business. This calculator shows per-unit and total contribution.
50 price, 30 variable cost, 500 units sold, 5,000 fixed costs: 20 contribution per unit (40% margin), 10,000 total contribution, 5,000 net profit. Above 30% margin is healthy for most businesses.
Use for pricing and volume decisions. If margin is 40%, every 100 price increase adds 40 to bottom line. Every extra unit at current margin adds the full 20 to profit (after break-even).
Quick example
With price per unit of 50 and variable cost per unit of 30 (plus units sold of 500 and fixed costs of 5,000), the result is 40.00%. Change any figure and watch the output shift — it's often more useful to see the pattern than to memorise the formula.
Which inputs matter most
You enter Price per Unit, Variable Cost per Unit, Units Sold, and Fixed Costs. Not every input has equal weight. Flip one at a time toward extreme values to feel which ones move the needle most for your situation.
What's happening under the hood
Contribution per unit = price - variable cost. Margin % = contribution/price. Net profit = (contribution × units) - fixed costs. The formula is listed in full below. If the number looks off, you can retrace the calculation by hand — that's the point of showing the working.
What the score tells you
Headline financial numbers — income, savings, debt — each tell part of the story. This calculation stitches several together into a single read you can track over time. The value is in the direction, not the absolute number.
What this doesn't capture
The score is a composite of the inputs you provide. Life context — job security, family obligations, health, housing — doesn't appear in the math but shapes the real picture. Use the number as a prompt, not a verdict.
£50 £ - £30 £ × 500 - £5,000 £ = 40.00%.
Inputs
This example uses typical values for illustration. Adjust the inputs above to match a specific situation and see how the result changes.
Sources & Methodology
Methodology
Contribution per unit = price - variable cost. Margin % = contribution/price. Net profit = (contribution × units) - fixed costs.
Frequently Asked Questions
Why does margin matter more than price?
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