If filing married (joint or separate), enter combined taxable amount for you and your spouse.
The contribution margin is a concept used with breakeven point or in break-even analysis. In words, the contribution margin is the amount of money a company has to cover its fixed costs after it pays all of its variable expenses.ontribution Margin per unit of sales = Sales Revenue per Unit-Variable Expenses per Unit. Contribution Margin-Fixed Costs = Net Operating Profit or Loss. The break-even formula calculates the point at which a company's sales are zero-there is no profit or loss:
The contribution margin of one unit is ($100 - $12 - $25 - $10) $53 because the fixed overhead per unit of $8 is not considered. Usefulness of Contribution Margin. Contribution margin is used by management when making pricing decisions. This is especially true in special pricing or special order situations where fixed costs are sunk costs and should not be factored into the decision whether to accept or reject. Negative or low contribution margins indicate a product line or business segment may not be profitable.