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
Famous quotes containing the word definition:
“No man, not even a doctor, ever gives any other definition of what a nurse should be than this—”devoted and obedient.” This definition would do just as well for a porter. It might even do for a horse. It would not do for a policeman.”
—Florence Nightingale (1820–1910)
“The very definition of the real becomes: that of which it is possible to give an equivalent reproduction.... The real is not only what can be reproduced, but that which is always already reproduced. The hyperreal.”
—Jean Baudrillard (b. 1929)
“Perhaps the best definition of progress would be the continuing efforts of men and women to narrow the gap between the convenience of the powers that be and the unwritten charter.”
—Nadine Gordimer (b. 1923)