Answer to Question #77436 in Accounting for joseph valino

Question

Contribution margin is

Answer 1

Contribution margin is a cost accounting concept that allows a company to determine the profitability of individual products. The phrase "contribution margin" can also refer to a per unit measure of a product's gross operating margin calculated simply as the product's price minus its total variable costs. This metric allows an entity to evaluate different areas of business to determine which service or product line to emphasize based on the highest margin.
Source:
https://www.investopedia.com/terms/c/contributionmargin.asp