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 ...

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.

Contribution margin is an important business accounting ratio that compares variable product and variable period expenses with the net sales or revenue for a given period. This measure closely relates ...