The formula to calculate the Contribution Margin per Unit is:
\[ \text{Contribution Margin per Unit} = \text{Sales Price per Unit} - \text{Variable Cost per Unit} \]
Where:
The Contribution Margin per Unit represents the incremental money generated for each product/unit sold after deducting the variable portion of the firm's costs.
Let's assume the following values:
Using the formula:
\[ \text{Contribution Margin per Unit} = 100 - 80 \]
Evaluating:
\[ \text{Contribution Margin per Unit} = 20 \]
The Contribution Margin per Unit is $20.
| Sales Price per Unit ($) | Variable Cost per Unit ($) | Contribution Margin per Unit ($) |
|---|---|---|
| 50 | 20 | 30.000000000000 |
| 50 | 40 | 10.000000000000 |
| 50 | 60 | -10.000000000000 |
| 50 | 80 | -30.000000000000 |
| 50 | 100 | -50.000000000000 |
| 75 | 20 | 55.000000000000 |
| 75 | 40 | 35.000000000000 |
| 75 | 60 | 15.000000000000 |
| 75 | 80 | -5.000000000000 |
| 75 | 100 | -25.000000000000 |
| 100 | 20 | 80.000000000000 |
| 100 | 40 | 60.000000000000 |
| 100 | 60 | 40.000000000000 |
| 100 | 80 | 20.000000000000 |
| 100 | 100 | 0.000000000000 |
| 125 | 20 | 105.000000000000 |
| 125 | 40 | 85.000000000000 |
| 125 | 60 | 65.000000000000 |
| 125 | 80 | 45.000000000000 |
| 125 | 100 | 25.000000000000 |
| 150 | 20 | 130.000000000000 |
| 150 | 40 | 110.000000000000 |
| 150 | 60 | 90.000000000000 |
| 150 | 80 | 70.000000000000 |
| 150 | 100 | 50.000000000000 |