Snap-On Inc. Contribution Margin and Contribution Margin Percent

Refer to the manufacturing company you selected for the Unit 2 Discussion and explain how you would determine the company’s contribution margin and contribution margin percent. In your initial post include the following: ● Identify which specific variables should be included in the calculation. ● Illustrate your explanation by calculating the contribution margin and contribution margin percent using hypothetical values. ● Explain what your calculated results tell you about the company’s sales and cost structure Contribution margin and contribution margin percent are two financial indicators that help a business understand cost volume pricing and it is imperative for a business in order to analyze unit cost, required unit pricing, sales volume goals, break-even points, etc. Contribution margin is a conceptual number that shows the profit per unit sold and it is calculated by subtracting variable expenses from revenues (Walther, L. M. & Skousen, C.J., 2009). Contribution margin percent refers to this same number expressed as a percentage, in other words, the difference between revenues and variable expenses divided by revenues, expressed as a percentage (Bragg, 2021).