In accounting, contribution margin actually refers to the difference between sales revenue and variable costs. Contribution is also known as gross profit. The contribution is the first profit level ...

A product's contribution margin tells you how much that product contributes toward paying your company's fixed costs -- and, once those costs have been covered, how much it contributes toward profit.

In a business, there are two types of costs: fixed and variable. It’s important to understand the difference between these two types of costs, which costs fit into each category, and how to account ...