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Podcast: Investor Connect Podcast
Episode: Startup Funding Espresso – Contribution Margin vs. Gross Margin
Description: Contribution Margin vs. Gross Margin Hello, this is Hall T. Martin with the Startup Funding Espresso -- your daily shot of startup funding and investing. The contribution margin is the same as the gross margin but without the fixed costs included. It includes only direct costs and variable costs. This means the contribution margin will always be the same or higher than the gross margin. The contribution margin is used for setting the selling price of a product and determining the profitability of the product. Fixed costs are considered sunk costs and should not be used in the calculation of...