Contribution margin
Contribution margin is a department's net profit, used to cover indirect expenses.
Definitions
According to College Accounting: A Practical Approach by Slater (13th edition),
- Contribution margin. A department's net profit, used to cover indirect expenses.
According to Cost Accounting by Horngren, Datar, Rajan (14th edition),
- Contribution margin. Total revenues minus total variable costs.
According to Product Manager's Handbook by Gorchels (2nd edition),
- Contribution margin. The amount of revenue left after incremental costs have been subtracted.
Related concepts
- Accounting (alternatively known as accountancy) is management of financial data, information, and knowledge about financial transactions of legal entities. Accountancy tends to include bookkeeping and, depending on a particilar enterprise, may also include quatitative analysis of financial data in the bookkeeping system and/or business intelligence.
