Contribution margin refers to the price you need to add to the rest of the product costs after selling some; if you want to calculate it, you will have to know some production cost values & then apply the formula.

You have to deduct variable price per product from price per product to know the cost margin & it’s a thing you should never forget to calculate.

## What Are the Purposes of Contribution Margin Calculator Online?

The uses of the contribution margin calculator is quite simple; they are:

- You have to know the value to add on your products that will help your brand to avoid loss.
- Moreover, you can control the pricing if you know both things; if you do it online, you won’t have to buy an expensive one.

## How to Calculate The Contribution Margin and Ratio?

To get the contribution margin ratio manually you need to know that formula. Here I will show you the formula how to calculate it manually by it’s percentage formula.

**Contribution margin** **formula**= (Per unit sales price x Number of Units) – (Variable Costs per Unit x Number of Units)

**Contribution margin ratio percentage formula**= Contribution Margin ÷ (Per units sales price x Number of Units)

**Profit generate formula=** Contribution margin – Fixed cost.

## Contribution Margin Calculation Example:

To see the live calculation please see the below example.

**Supposed:**

- Per Unit Sales price: 100
- Variable cost per Unit: 8
- Number of Units: 12
- Fixed cost: 0

Now see how our calculator calcuate the data.

**Contribution margin**= (100 x 12) – (8 x 12)

= 1200 – 96

= 1104

**Contribution margin ratio**= 1104 ÷ ( 100 x 12)

= 1104 ÷ 1200

= .92

That means 92%. Because if we want to calculate it in percentage then we need to multiply it by 100%. So, *.92 x 100%= 92%*

**Profit generate**= 1104 – 0

= 1104

Because our fixed cost value was 0.

## Contribution Margin Calculation Formula Excel:

You can easily calculate the contribution margin in excel by the below formula.

**Contribution margin**= `(Per unit sales price * Number of Units) - (Variable Costs per Unit * Number of Units)`

At first design your excel sheet like the below table:

A | B | |

1 | Per Unit Sales price: | |

2 | Variable cost per Unit: | |

3 | Number of Units: | |

4 | Fixed cost: | |

5 | Contribution margin: | =B1 * B3 – B2 * B3 |

6 | Contribution margin ratio: | =B5 / (B1 * B3) |

**Example:**

If your input data 100, 8, 12, 0 then your calcuation would be

= B1 * B3 – B2 * B3

=100 * 12 – 8 * 12

= 1200 – 96

= 1104

### How To Calculate Contribution Margin Ratio in Excel?

You can also calculate the ratio. To calculate the ratio type the below formula on B6 cell.

**=B5 / (B1 * B3)**

Unfortunately still if you can’t understand then look the below screenshot.