Calculating contribution margin
You can use a contribution margin in IBM® Cognos® Insight to show which products are the most profitable, which ones are breaking even, and which ones are costing you more than they earn in revenue.
About this task
You can use this information when planning sales forecasts and sales incentives as well as the product mix for next year. You can also add measures to allocate additional costs that are not included in the unit cost, such as overhead. You can spread these additional costs proportionally, and include them in your contribution margin calculation.
The steps use unit price and cost of goods listed for each product as an example. You want to calculate the contribution margin for each product.