What is the difference between Gross profit and Total contribution margin ?

Question

Utilisateur supprimé · Answer

1)Gross Profit Margin = total sales revenue - total direct costs of goods sold

2)Contribution Margin = (revenue from sales of an item - production costs for the item ) ÷ revenue from sales of the item

Mohan Paudel · Answer

The contributin margin does not consider the closing stock its purely the profit derived from sales of the product .

calculated as Contribution margin per unit=(SPPU-VCPU)/SPPU

where sppu =selling price per unit

VCPU =variable cost per unit.