Dictionary of Accounting Terms: Contribution Margin (CM) Variance
Contribution Margin (CM) Variance
difference between actual contribution margin per unit and the budgeted contribution margin per unit, multiplied by the actual number of units sold. If the actual CM is greater than the budgeted CM per unit, a variance is favorable; otherwise, it is unfavorable.
CM Variance = (Actual CM Per Unit - Budgeted CM Per Unit) × Actual Sales
