contribution margin

(redirected from Contribution Margins)

Contribution margin

The difference between variable revenue and variable cost.

Contribution Margin

The profit a company makes on a product calculated by subtracting its variable revenues from its variable costs. Because variable revenues and costs are largely dependent on the business cycle, a company with a high contribution margin is likely to have an even higher margin during economic expansion.

contribution margin

The price at which a firm sells its product less the variable cost of producing the product. A company with a large contribution margin is likely to experience substantial profit increases during an economic upswing.
References in periodicals archive ?
This study found substantial differences in the costs, payments, and contribution margins for patients undergoing cardiac valve replacement surgery, depending on type of insurance coverage.
The resulting effects on the contribution margins of the two products are shown in Figure 3.
Contract award: the ikk-west requires an analysis software that allows comprehensive analysis of all existing social data, in particular the morbi-rsa relevant data is possible and also insured relative contribution margins can be determined.
5) Townsley (1993) writes that small independent colleges and universities are successful when their leaders are "aware of the central role that contribution margins have upon programs and upon the scale of the administration and student services" (p.
measures the joint effect of the difference between the two unit contribution margins and the variation in volume of service, on the total variance in contribution margin.
2) Cases in which implant charges or supplies exceeded $10,000 were found to have contribution margins as low as $15 per hour.
Although this strategy increased our contribution margins from the second quarter, it did affect our CNG sales where lower margin work was deferred until later quarters as we continue to work on further production efficiencies and reduction in our raw material costs.
By subsequently subtracting the relevant fixed costs from the contribution margin, different contribution margins on different layers can be obtained.
As previously stated, historical rigid container sheet contribution margins have been adversely affected by a slower rate of growth in demand and excess rolling capacity, and it is expected that 1994 contribution margins will decline 25 percent to 35 percent from historical levels.
But in a firm where the product lines are diverse and incur costs in different proportions, determination of the variable cost component must become more detailed to accurately determine the contribution margins of the products.
A financial analysis reveals positive contribution margins for both the inpatient wound service and the hyperbaric service with creation of the new inpatient wound service line.

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