Hi,

The contribution margin can be stated on a gross or per-unit basis. It represents the incremental money generated for each product/unit sold after deducting the variable portion of the firm's costs.

The formula is C=R−V (Where C = Contribution margin, R = Revenue, V = Variable Cost)

For Eg:

To Produce a Pen, we have the costs:

1. Raw Material Cost = 0.2$
2. Electricity Charges = 0.1$
3. Labor Charges = 0.3$

Total Variable Cost to produce one pen is 0.6$. For 100 units of pen, 60$ is required.

In the case of fixed cost, it may be a machinery value, which will not vary based on the no. of units produced.

In Odoo, we'll get Revenue of each products & corresponding costs (Direct cost) in real time. Other variable costs we have to define as per the respective calculation (We can take one month total production quantity & related other variable costs, it can be distributed among the no. of qty & will get the per unit product variable cost).

Thank You.