3 articles tagged "contribution margin"
The margin formula looks simple — subtract cost from price, divide by price — but small mistakes in what counts as 'cost' can quietly distort every number that depends on it. Here's how to get it right every time.
Before you can answer 'is this business viable?' you need to know one number: how many units or how much revenue you need to break even. This guide covers the full concept from first principles, with worked examples.
The break-even formula only has three inputs, but getting the classification of fixed versus variable costs wrong is the single most common reason the resulting number is unreliable. Here's how to get every input right.