Accounting for Managers

1. If you need to estimate how much of your business’s revenues will be available to cover the fixed expenses after dealing with the variable costs, this calculator is the perfect tool for you.
2. This means Dobson books company would either have to reduce its fixed expenses by $30,000.
3. Variable Costs depend on the amount of production that your business generates.
4. Accordingly, in the Dobson Books Company example, the contribution margin ratio was as follows.

How Do You Calculate the Contribution Margin?

Contribution Margin vs. Gross Profit Margin