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What is Total Contribution?

Updated: 9/13/2023
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15y ago

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Total contribution is .. When more than one unit is sold, the total contribution can be calculated. You work it out by: total revenue minus total variable = total contribution eg. 1,000 pair of trousers, variable costs are £7.50 per pair, sold at £9.00 per pair. = total contribution total revenue - total variable cost = (£9.00 x 1,000) - (£7.50 x 1,000) = 9,000 - 7,500 = £1,500 This £1,500 will contribute to the companies fixed costs & profit. Another way of working out the total contribution would be multiplying the unit contribution by the number of units sold. = total contribution unit contribution x number of units sold = (£9.00 - £7.50) x 1,000 = £1.50 x 1,000 = £1,500 Hope this helps :P

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15y ago
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How do you calculate the average contribution margin?

Formula for calculating average Contribution margin Average contribution margin = total contribution margin / total number of units


What is the difference between Contribution Margin per unit and contribution margin ratio?

Contribution margin ratio is overall total contribution margin while contribution margin ration per unit is the allocation of total production contribution margin to per unit basis.


What does a contribution ratio mean?

To compute the contribution ratio, you should divide the largest revenue source by the total revenue.


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What is meant by the term contribution margin ratio?

The term contribution margin ratio is the percentage of contribution over total revenue. It is used in cost-volume-profit analysis, a form of management accounting.


Weighted-average contribution margin?

Weighted average contribution margin is the weighted amount of contribution margin generated by all units of different mix of products to recover the total fixed cost of company.


Why is it important to determine the contribution point?

Once the contribution margin is determined, it can be used to calculate the break-even point in volume of units or in total sales dollars.


Contribution Margin per unit versus contribution margin ratio?

Contribution margin ratio determines the percentage of variable cost in over all sales while contribution margin per unit tells the variable cost portion in per unit total cost or sales price.


Does a recategorization on WikiAnswers count as a contribution?

Yes, a recategorization counts as a contribution. Every time you mark in or unmark a category, it counts as one contribution. Therefore, you can get a total amount of 6 contributions for unmarking 3 categories, and marking 3 categories.


How do the formulas differ for contribution margin per unit and contribution margin ratio?

Contribution margin per unit = Contribution margin / number of units of products Contribution margin ratio = Contribution margin / Net sales The formula is different for both situations because contribution margin per unit calculates the contribution margin for one unit of product while contribution margin ratio calculates the contribution margin for total overall sales as overall sales may be included different mix of products with diff rent fixed and variable costs that's why both of these are calculated separately


How many contributions can you have in total?

The amount of contribution you are allowed would depend on what you are trying to contribute too. There is no limit to how many times you contribute to charity, but there are limits on contribution that can be made to IRAÕs.


What is the maximum ira contribution for 2014?

Maximum IRA contribution is $5,000 or your taxable salary, whichever is less. If you are over 50, you can add an additional amount of $1,500 for a total of $6,500.