Contribution Pricing

Knowledge Center

• About
• Home
• Dictionary
• Encyclopedia
• Question?
• Views

• Register
• Log in
• Help

• Change & Organization
• Communication & Skills
• Decision-making & Valuation
• Ethics & Responsibility
• Finance & Investing
• HRM
• Knowledge & Intangibles
• Leadership
• Marketing
• Program & Project
• Strategy
• Supply Chain & Quality

Description of Contribution Pricing. Explanation.

Definition Contribution Pricing. Description.

Contribution Pricing is a form of cost-plus pricing which involves separating the different products that make up the product portfolio and allocating to them the direct costs associated with their production. The price is determined at a level which will generate revenues in excess of these costs, thereby contributing towards meeting business overheads. Individual products can be analyzed in terms of their ability to cover their direct costs and contribute to overheads.

It is a methodology where the price charged is based on the variable costs of production. A price is set that is greater than the variable costs, so that a contribution is made towards recovering the fixed costs. "Contribution" here means the difference between the price charged and the variable costs involved in producing a good.

Contribution Pricing Forum   Costing Strategy for Volatile Mustard Oil Need strategy for pricing of volatile mustard oil as it's a commodity market......           What's the Meaning of Contribution Pricing in Bonds? Contribution Pricing in bonds?...         Begin a new topic

Contribution Pricing Special Interest Group Special Interest Group

Best Practices - Contribution Pricing Premium

Expert Tips - Contribution Pricing Premium

Resources - Contribution Pricing Premium   News Contribution Pricing         Videos Contribution Pricing         Presentations Contribution Pricing         More Contribution Pricing

Compare also: Variable Costing

Return to Management Hub: Finance & Investing  |  Marketing  |  Supply Chain & Quality

More on Management  |  Return to Management Dictionary  | 

This ends our Contribution Pricing summary and forum.