Executive & Board / Financial Strategy

Contribution Margin CM (unit and aggregate)

What each sale contributes toward fixed costs and profit after covering the costs that vary with the sale itself.

The fork, why two teams get different numbers

Contribution margin and gross margin are routinely conflated but are not the same cut.

In the Metric Library

The full fork, both definitions worked all the way through
The trap that makes the number lie, on a real export
Every formula variant, spelled out
The reconciliation anchor, what to tie it to and when to refuse

Reference: Institute of Management Accountants (managerial cost classification) · FASB ASC 330 (inventory / product cost) for the gross-margin reconciliation