Edit Article  Edited by Bibaco, Master Singleton  Contribution
margin is a concept employed in a branch of managerial
accounting known as cost-volume-profit (CVP) analysis. The
contribution margin of a particular product is simple to
calculate and has enormous utility in determining the operating
leverage of a company-the relation between sales increases and
profit increases. Learning how to calculate the contribution
margin for a product is a simple process, but should be
augmented with other financial metrics for use in CVP analysis.
Edit Steps    1. 1     Familiarize yourself with the calculation
of the contribution margin. A given product's contribution
margin results from a simple calculation. The revenue per unit
sold (the price) minus the unit variable cost yields the unit
contribution margin. Therefore, the contribution margin can be
classified as the amount of money each unit brings in after
recouping its own variable costs.   2. 2     Determine the unit
revenue of the product in question. The unit