Contribution is defined as the amount by which price exceeds variable cost per unit. Contribution stated as a percent of price is known as contribution margin.

Contribution Margin

The amount of revenue remaining after deducting variable costs, used to cover fixed costs and generate profit.

Variable Cost

Expenses that vary depending on the amount of products or services a company generates.

Contribution

The amount of money or resources that an individual or entity provides towards a particular project, investment, or cause.