What is the difference between gross margin and contribution margin?

Gross mergin is a simple equation used to determine the percentage revenue that remain after accepting for the cost of goods sold. _The contribution is very similar,but it's used on a smaller scale to analyze how much income per unit remsin as aprofit after accounting for all vsris costs. _The contribution mergin is cslulated by dividing the net profit per unit after variable cost by the original revenue per unit

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Gross margin comes after deducting the prime cost i.e. all manufacturing cost (both direct & indirect) from revenue whereas contribution margin is equal to revenue minus all direct costs.

The calculation of the Gross Profit is: Sales minus Cost of Goods Sold. The Cost of Goods Sold consists of the fixed and variable product costs, but it excludes all of the selling and administrative expenses. Contribution Margin is Net Sales minus the variable product costs and the variable period expenses.