The weighted average units contribution margin is used in a multiple product business to calculate the contribution margin per unit for a given sale percentage mix. The concept is useful for establishing the break even point in units.
Last modified November 13th, 2018 by Michael Brown
This average gross margin calculator will help you to estimate the weighted average gross margin for a business. Normally a business will have a number of product lines and know the gross margin on each, to calculate the average gross margin for the business it is necessary to weight each product margin by its corresponding revenue.
The Excel sheet, available for download below, helps a business convert from margin to markup or from markup to margin, and also calculates the cost multiplier which can be used to apply to a cost price to calculate the corresponding selling price.
Markup and margin are two ways of looking at the same thing depending on whether your starting point is cost or selling price for a product. Quite simply, markup is profit divided by the cost price, and margin is profit divided by the selling price.