Contribution margin per unit is divided by selling price to calculate contribution margin percentage. The contribution margin ratio is the difference between a company's sales and variable expenses, expressed as a percentage. The total margin generated by an entity represents the total earnings available to pay for fixed expenses and generate a profit.
If fixed cost is $40000 and contribution margin per unit is $800 per unit, then breakeven of units will be
Selling price is multiplied to quantity of sold units to calculate revenues. Revenue is the income generated from normal business operations and includes discounts and deductions for returned merchandise. It is the top line or gross income figure from which costs are subtracted to determine net income.
In a relevant range, variable cost per unit, selling price and total fixed costs are
Competitiveness can be best measured by gross margin. Gross margin is a company's net sales revenue minus its cost of goods sold (COGS). In other words, it is the sales revenue a company retains after incurring the direct costs associated with producing the goods it sells, and the services it provides.