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:
“One definition of man is “an intelligence served by organs.””
—Ralph Waldo Emerson (1803–1882)
“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 man who knows governments most completely is he who troubles himself least about a definition which shall give their essence. Enjoying an intimate acquaintance with all their particularities in turn, he would naturally regard an abstract conception in which these were unified as a thing more misleading than enlightening.”
—William James (1842–1910)