Answer:
Contribution margin = Revenue − Variable costs
Step-by-Step Explanation
For example, if the price of your product is $20 and the unit variable cost is $4, then the unit contribution margin is $16.
The first step in doing the calculation is to take a traditional income statement and recategorize all costs as fixed or variable. This is not as straightforward as it sounds, because it’s not always clear which costs fall into each category.
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