Fill in your product details on the left and click Calculate to see your full contribution margin analysis.
The contribution margin tells you how much money is left after covering the costs that change with each unit you make or sell.
Example: You sell a product for $50. Variable costs are $30. CM = $20. CM Ratio = 40%. If fixed costs are $4,000, break-even = 200 units.
| Sell Price | Var Cost | CM / Unit | CM Ratio |
|---|---|---|---|
| $10 | $4 | $6.00 | 60% |
| $25 | $15 | $10.00 | 40% |
| $50 | $30 | $20.00 | 40% |
| $100 | $45 | $55.00 | 55% |
| $200 | $80 | $120.00 | 60% |
| $500 | $350 | $150.00 | 30% |
Variable costs change directly with the number of units you make or sell. Each extra unit adds more variable cost. Examples:
Fixed costs stay the same no matter how many units you make. They don't go up if you produce more. Examples: rent, insurance, salaried staff, equipment depreciation, and software subscriptions.
The break-even point is where your total revenue equals your total costs — no profit, no loss. Below it, you lose money. Above it, you profit.
Break-Even Units = Fixed Costs ÷ CM Per Unit
The margin of safety is the gap between your actual sales and break-even sales. A larger margin means your business can survive a bigger drop in sales before losses begin.
MOS % = (Actual Sales – Break-Even Sales) ÷ Actual Sales × 100
Total CM at different selling prices and volumes. Variable cost assumed at 40% of selling price.
| Units Sold | $10/unit VC: $4 |
$25/unit VC: $10 |
$50/unit VC: $20 |
$100/unit VC: $40 |
$200/unit VC: $80 |
|---|
Total CM = (Selling Price – Variable Cost) × Units Sold. VC = 40% of price. Currency: $.
How many units you must sell to cover fixed costs at different CM per unit values.
| Fixed Costs | CM $5/unit | CM $10/unit | CM $20/unit | CM $50/unit | CM $100/unit |
|---|
Break-Even Units = Fixed Costs ÷ CM Per Unit. Lower CM per unit requires far more units to break even.
Benchmark CM ratios across common industries to see how your product compares.
| Industry | Typical CM Ratio | Main Variable Costs | Key Notes |
|---|---|---|---|
| 💻 Software / SaaS | 70–90% | Hosting, payment fees | Very low VC per user |
| 💡 Consulting / Services | 60–80% | Direct labor (if hourly) | High if salaried staff |
| 🏭 Manufacturing | 30–60% | Materials, direct labor | Varies by product type |
| 🛒 Retail | 20–40% | Cost of goods sold | Thin margins, high volume |
| 🍔 Food & Beverage | 60–75% | Ingredients, packaging | Waste affects CM |
| 🏨 Hospitality / Hotels | 40–70% | Housekeeping, amenities | Occupancy-dependent |
| 📦 E-commerce | 25–50% | Product cost, shipping | Ad cost often variable |
| 💊 Pharmaceuticals | 70–85% | Active ingredients | High R&D in fixed costs |
| 🏗️ Construction | 15–30% | Materials, subcontractors | Project-based variation |
| ✈️ Airlines | 10–25% | Fuel, crew, meals | High FC (planes, gates) |
These are approximate benchmarks. Actual CM ratios vary by company size, pricing strategy, and market conditions.
Estimated yearly profit at different sales volumes. Assumes fixed costs of $60,000/year.
| Units / Year | CM $10/u | CM $20/u | CM $30/u | CM $50/u | CM $100/u |
|---|
Net Profit = (CM Per Unit × Units) – $60,000 fixed costs. Negative values shown in parentheses (loss).
Estimated take-home profit after common business tax rates. Assumes $60,000 fixed costs.
| Gross Profit | After 10% Tax | After 15% Tax | After 21% Tax | After 28% Tax | After 37% Tax |
|---|
After-Tax Profit = Gross Profit × (1 – Tax Rate). Tax rates are illustrative — consult a tax professional for your jurisdiction.
DOL = Total CM ÷ Net Operating Profit. Higher DOL = more profit sensitivity to sales changes.
| Total CM | Net Profit $1K | Net Profit $5K | Net Profit $10K | Net Profit $25K | Net Profit $50K |
|---|
A DOL of 5× means a 10% rise in sales leads to a 50% rise in profit. High DOL amplifies both gains and losses.