In my early years I often got confused between the terms Gross Contribution and Marginal Contribution and I found I was definitely not alone.
So I thought that you would benefit from a simple model which helps illustrate this difference.
Play with it and enter your own figures to see how it works.
Marginal Cost: This is your variable cost per unit
Marginal Contribution: Price - Variable Cost = How much each unit contributes
Gross Contribution: Marginal Contribution Ć Units Sold = Total contribution
Operating Profit: Gross Contribution - Fixed Costs = Your profit
