Contribution Margin
- Social Sciences -
Economics & Business Dictionary
Definition
An economics and business concept defining a measure, method, or organizational practice used for analysis and decision-making. It specifies how information is generated or used to guide allocation of resources and evaluation of outcomes. It does not ensure correctness without clear assumptions, reliable inputs, and appropriate review of results.
Contribution Margin
- Social Sciences -
Finance & Accounting Dictionary
Definition
A derivatives and risk concept defining instruments and measures used to transfer, price, and control financial exposures. It governs sensitivity measures, hedging effectiveness, and loss estimation under adverse market or credit conditions. It does not remove risk and requires appropriate limits, collateral processes, and validation of models and assumptions.
Contribution Margin
Social Sciences Dictionary
Definition
The per‑unit difference between selling price and variable cost (Contribution Margin per unit = Price − Variable Cost per unit); the total contribution equals the per‑unit margin multiplied by quantity and is the amount available to cover fixed costs and, beyond that, profit.