What is the donation Margin?

The donation margin is a measurement through which us understand exactly how much a company’s network sales will contribute to the fixed expenses and also the net profit after covering the change expenses. So, when calculating the contribution, us deduct the total variable prices from the network sales.

Contribution Margin Formula

To calculate this ratio, all we need to look at room the network sales and the full variable expenses. This is the formula –

Contribution Margin = network Sales – complete Variable Expenses




You are watching: Which of the following formulas is used to calculate the contribution margin ratio?

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You have the right to download this template here – donation MarginRatio Excel Template

Contribution Margin Video


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This has actually been a overview to the donation Margin and also its meaning.

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