A socio-ecological system consists of 'a bio-geo-physical' unit and its associated social actors and institutions.
Contribution Margin. Contribution margin is a productâs price minus all associated variable costs, resulting in the incremental profit earned for each unit sold. The total contribution margin generated by an entity represents the total earnings available to pay for fixed expenses and to generate a profit. The contribution margin concept is useful for deciding whether to allow a lower price in special pricing situations.
In this example the contribution margin per unit is $14 (the selling price of $20 minus the variable manufacturing costs of $4 and variable SG&A expenses of $2). Hence, the contribution margin ratio is 70% (the contribution margin per unit of $14 divided by the selling price of $20). This contribution margin ratio tells us that 70% of the sales, revenues, or selling price is available to cover the $31,000 of monthly fixed costs and fixed expenses.