A product's contribution margin tells you how much that product contributes toward paying your company's fixed costs -- and, once those costs have been covered, how much it contributes toward profit.

Profit is the ultimate goal for any business. Business owners selling goods or services use the unit contribution margin to determine the profit per unit. It is calculated as a percentage or dollar ...

To run a company successfully, you need to know everything about your business, including its financials. One of the most critical financial metrics to grasp is the contribution margin, which can help ...

Portions of this article were drafted using an in-house natural language generation platform. The article was reviewed, fact-checked and edited by our editorial staff. Contribution margin is used to ...

Both metrics assess a company's profitability, but in different ways Claire Boyte-White is the lead writer for NapkinFinance.com, co-author of I Am Net Worthy, and an Investopedia contributor.

Contribution margin is the amount of money left over from sales after deducting variable costs. It represents the portion of sales that helps cover fixed costs and eventually contributes to profit. By ...