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Contribution Margin Ratio | Contribution Margin Formula. The contribution margin ratio is the difference between a company's sales and variable expenses, expressed as a percentage. The total margin generated by an entity represents the total earnings available to pay for fixed expenses and generate a profit.o calculate the contribution margin ratio, divide the contribution margin by sales. The contribution margin is calculated by subtracting all variable costs from sales.
Contribution Margin Ratio. The contribution margin ratio takes the concept of the contribution margin per unit produced and calculates it as a percentage of the sales price per unit. This shows what percentage of sales is made up of the contribution margin.he contribution margin ratio takes the concept of the contribution margin per unit produced and calculates it as a percentage of the sales price per unit.