How To Calculate Contribution Margin
Posted by admin on Sun, 08/08/2010 - 21:27 in
Contribution margin is a cost accounting concept that allows a company to determine the profitability of individual products. Calculating for the contribution margin helps in gauging the failure or success of a company's product line by matching up one line's profitability with another. With this system, you will be able to determine what products you need to add or remove from a product line to increase revenue. Options of reducing variable cost and increasing sales price are also available for managers in increasing the contribution margin.
