[Anonymous]

Does anyone else find the term contribution margin confusing compared to what it actually is? This might be a dumb question, but where does the term contribution come in? I’ve found that their are like 3 or 4 different names for contribution margin (marginal income, gross profit). Maybe someone can be kind enough to take some of the mystery out of this term for me; i’m probably missing something here.

[Anonymous]

I always looked at it as how much is left to contribute to fixed cost

Sales – Variable Cost = Contribution Margin (Gross Profit)

[mla1169]

Its the amount leftover to be “contributed” to fixed expenses and net profit.

FAR- 77
AUD -49, 71, 84
REG -56,75!
BEC -75

Massachusetts CPA (non reporting) since 3/12.

[Anonymous]

It's the amount that is contributed from sales after considering variable costs.

Sales – variable costs = the amount the activity contributes to the fixed costs

I'd know it well….it is important to ratios and cost accounting.

[Anonymous]

I knew it was a dumb question, thanks for the answers, that makes sense though, although, no where does it give a good straight forth answer like that. Seems deceiving at first glance. Thanks!

[Author]

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