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:
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.