Definition
The Unit Contribution Margin (C) is Unit Revenue (Price, P) minus Unit Variable Cost (V):
The Contribution Margin Ratio is the percentage of Contribution over Total Revenue, which can be calculated from the unit contribution over unit price or total contribution over Total Revenue:
For example, if the price is Rs10 and the unit variable cost is Rs2, then the unit contribution margin is Rs8, and the contribution margin ratio is Rs8/Rs10 = 80%.
Read more about this topic: Contribution Margin
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