Contribution Margin: Definition & How to Calculate It

What it is

Investopedia's plain-English explainer on contribution margin — sales revenue minus variable costs — with worked examples and how to use it for pricing and product decisions.

Why I recommend it

If you sell anything, know this number before you set a price. It tells you what each sale actually contributes after variable costs.

Topics

#accounting #article #entrepreneurship #finance #free #pricing #reading #small-business #unit-economics

Added Sep 2, 2026 · 0 opens