Contribution Margin Calculator

How much does each unit you sell actually contribute toward covering fixed costs and turning a profit? Enter your price, variable cost, units sold, and fixed costs to get the full cost-volume-profit picture — contribution margin, operating profit, break-even, and margin of safety — in one pass.

How to use it

1. Enter the selling price and variable cost per unit.
2. Enter units sold (actual or projected) and total fixed costs for the period.
3. Optionally enter a target profit to see how many units you'd need to sell to hit it.

The formulas

Unit Contribution Margin   = Selling Price − Variable Cost
Contribution Margin Ratio  = Unit Contribution Margin ÷ Selling Price × 100

Total Revenue              = Selling Price × Units Sold
Total Variable Cost        = Variable Cost × Units Sold
Total Contribution Margin  = Total Revenue − Total Variable Cost
Operating Profit           = Total Contribution Margin − Fixed Costs

Break-Even Units           = Fixed Costs ÷ Unit Contribution Margin
Break-Even Sales           = Break-Even Units × Selling Price

Margin of Safety (Units)   = Units Sold − Break-Even Units
Margin of Safety (%)       = Margin of Safety (Units) ÷ Units Sold × 100

Units for Target Profit    = (Fixed Costs + Target Profit) ÷ Unit Contribution Margin

What does contribution margin actually tell you?

It's the amount each unit sold leaves over after covering the costs that scale with volume (materials, packaging, commission) — that leftover is what pays down your fixed costs first, then becomes profit. A higher contribution margin ratio means more of every sales dollar is available to do that.

What is margin of safety for?

It's the cushion between what you're actually selling and the bare minimum you need to break even — expressed both in units and as a percentage of current sales. A thin or negative margin of safety means a small sales dip could push you into a loss; a wide one means you have room to absorb a downturn.

Need the bare break-even point without a units-sold figure on hand? Use the Break-Even Point Calculator instead — this tool builds on the same math but layers on actual volume, total profit, and margin of safety.

Privacy

All calculations run in your browser. Nothing you enter is sent to a server.