Contribution Margin Calculator: calculate contribution margin for your business. Formula, benchmarks, and practical tips included.
Contribution Margin per Unit = Selling Price − Variable Cost per Unit
Break-Even Units = Fixed Costs ÷ Contribution Margin per Unit
Break-Even Revenue = Break-Even Units × Selling Price
Margin of Safety = (Actual Sales − Break-Even Sales) ÷ Actual Sales × 100%
Worked example: Fixed costs 10,000/month. Selling price 50/unit. Variable cost 20/unit. Contribution margin = 30/unit. Break-even units = 10,000 ÷ 30 = 334 units/month. Break-even revenue = 334 × 50 = 16,700/month. If the business sells 500 units/month, margin of safety = (500 − 334) ÷ 500 × 100 = 33%.