Variable Margin Calculator

Formula

The formula to calculate the Variable Margin is:

\[ \text{VM} = \frac{\text{UR} - \text{VC}}{\text{UR}} \times 100 \]

Where:

VM is the Variable Margin (%)
UR is the unit revenue ($)
VC is the variable costs ($)

What is Variable Margin?

Variable Margin (VM) is a financial metric that measures the percentage of revenue that exceeds variable costs. It is calculated by subtracting variable costs from unit revenue, dividing the result by unit revenue, and then multiplying by 100 to express it as a percentage.

Example Problem

Let's assume the following:

Unit Revenue (UR): $100
Variable Costs (VC): $60

Step 1: Calculate the variable margin:

\[ \text{VM} = \frac{100 - 60}{100} \times 100 = \frac{40}{100} \times 100 = 40\% \]

Therefore, the variable margin is 40%.