Formula of Contribution
To find the contribution margin, take the difference between how much a product sells for and the fluctuating costs that come with making and selling it. The following formula shows how to say this,
C = R – V
Where C is the contribution surplus, R is the total income, and V is the cost of changes. You might also find it helpful to show the contribution margin as a percentage of the total income. When you divide the contribution margin by the total income for the same time period, you get the Contribution Margin Ratio (CR),
CR =