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What (who) is contribution margin - definition
Contribution margin
COST ACCOUNTING TERM
Contribution margin analysis; Contribution Margin; Contribution analysis; Contribution per unit; Unit contribution margin; Contribution margin ratio; Dollar contribution per unit
Contribution margin (CM), or dollar contribution per unit, is the selling price per unit minus the variable cost per unit. "Contribution" represents the portion of sales revenue that is not consumed by variable costs and so contributes to the coverage of fixed costs.
Contribution margin-based pricing
Contribution margin-based pricing is a pricing strategy which works without any mention of gross margin percentages. (German:Deckungsbeitrag) It maximizes the profit derived from a company's assortment, based on the difference between a product's price and variable costs (the product's contribution margin per unit), and on one's assumptions regarding the relationship between the product's price and the number of units that can be sold at that price.
Gross margin
..jpg?width=200 "Markup vs. Gross Margin (by Adrián Chiogna)")
RELATING GROSS PROFITS TO NET SALES
Gross Margin; Gross profit margin; Gross margin ratio; Gross profit percentage; Margin (%); Unit margin
Gross margin is the difference between revenue and cost of goods sold (COGS), divided by revenue. Gross margin is expressed as a percentage.
