Contribution Margin Ratio Calculator

About this calculator

The contribution margin ratio is (Sales − Variable Costs) / Sales, expressed as a percentage — it tells you what fraction of every sales dollar is left over after variable costs (materials, sales commissions, shipping, and similar costs that scale with volume) to go toward covering fixed costs and, beyond that, profit.

It is a core input of cost-volume-profit (CVP) analysis in managerial accounting: dividing total fixed costs by the contribution margin ratio gives the break-even sales figure, and the ratio also shows how sensitive operating profit is to changes in sales volume — a business with a high ratio sees profit swing sharply with sales, while a low ratio means more revenue is needed just to reach the same profit change.