Contribution Margin Ratio
ContentContribution Margin DefinitionHow To Calculate Contribution MarginDegree Of Operating LeverageCalculate The PriceContribution Margin Ratio This means that you can reduce your selling price to $12 and still cover your fixed and variable costs. Now, this situation can change when your level of production increases. As mentioned above, the per unit variable cost decreases with the increase in the level of production. An associated complexity of understanding how to calculate your contribution margin ratio is properly allocating fixed and variable costs. [...]
