What is dækningsbidrag (contribution margin)?

In short

Dækningsbidrag is revenue minus variable costs. It shows what a product or an order contributes towards covering the business's fixed costs.

In practice

The contribution margin is used for pricing and for judging which products actually make money. As a percentage of revenue it is the contribution ratio. When total contribution exceeds fixed costs, the business is profitable.

Related terms

• Variable omkostninger (variable costs)
• Faste omkostninger (fixed costs)
• Bruttofortjeneste (gross profit)
• See every term in the dictionary

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