Contribution Margin
Contribution margin is the difference between the selling price of a product and the direct costs of producing that product. The net result is the amount of money left over to pay for indirect costs, overhead then hopefully leave a profit.
Contribution margin can be viewed from the point of view of a product, a product line, an order, or for a time period such as a month or a year for the entire product line or company, or it can be viewed in numerous other ways.