If a product has a selling price of $150 and variable costs of $90, what is its contribution margin?

The contribution margin is the amount each unit sold adds to covering fixed costs and profit. To find it, subtract the variable cost per unit from the selling price per unit. Here, the selling price is $150 and the variable cost is $90, so $150 − $90 equals $60. Thus, each unit contributes $60 toward fixed costs and profit. For example, if you sell 10 units, the total contribution margin is 10 × $60 = $600.