Contribution Margin
Contribution as percentage of sales price.
Formula
Contribution Margin = (Contribution ÷ Selling Price) × 100
Real World
Apple's iPhone has an estimated contribution margin above 60%, meaning over half of each sale price is available to cover fixed costs, which is why Apple remains highly profitable even when sales volumes dip.
Exam Focus
Express contribution margin as a percentage and compare it to rivals or industry norms to score evaluation marks.
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