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Sagot :
Contribution margin ratio is 24%
Contribution margin ratio = 100% - Variable expense%
=100%-76%
=24%
Contribution Margin:
You can provide the contribution margin as a gross or per-unit figure. After removing the variable element of the company's expenditures, it indicates the additional revenue made for each product or unit sold.
By subtracting the variable cost per unit from the selling price per unit, the contribution margin is calculated. The metric, which is often referred to as dollar contribution per unit, shows how much a certain product adds to the company's overall profit.
It offers a means of illustrating the profit potential of a certain item or service a business offers, as well as the percentage of revenue that goes toward paying the business' fixed expenses. Profit is defined as whatever income that remains after paying fixed costs.
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