Weighted Average Contribution Margin Calculator

About this calculator

When a company sells more than one product, a single overall contribution margin only makes sense as a weighted average — each product’s contribution margin (price minus variable cost) blended according to its share of the total sales mix, since a low-margin, high-volume item and a high-margin, low-volume item pull the blended number in opposite directions.

That weighted average CM is what turns multi-product break-even analysis from guesswork into arithmetic: total fixed costs divided by the weighted average contribution margin (in dollars per unit, or as a ratio against weighted average price) gives the combined unit volume — split across the product mix — the business needs to sell before it starts generating profit. This is a core piece of cost-volume-profit (CVP) analysis used by managerial accountants and CFOs to set sales targets and evaluate how a shift in product mix changes profitability.

This calculator takes the price, variable cost and sales-mix share of three products and returns the blended contribution margin and the multi-product break-even point.