Contribution margin
The amount each sale contributes toward fixed costs and profit after direct variable costs.
Find the units, customers, jobs or revenue your business needs to cover its costs.
Fixed costs ÷ (selling price − variable cost)
For a revenue-only calculation, divide fixed costs by the gross margin percentage expressed as a decimal.
The amount each sale contributes toward fixed costs and profit after direct variable costs.
The minimum sales revenue needed before the business begins producing operating profit.
The distance between expected sales and break-even. A larger cushion generally means less operating risk.