Revenue per unit minus cost of goods sold equals:

The calculation of revenue per unit minus the cost of goods sold yields the contribution margin. This figure represents the amount available to cover fixed costs after accounting for variable costs related to the production of goods.

The contribution margin is crucial for understanding how much revenue is available to contribute to the overall profitability of a business after the variable costs associated with the goods sold have been deducted. It essentially helps in determining the financial health of a business, especially when analyzing how effectively a company can start increasing its profits as sales volume rises.

This metric is vital for decision-making regarding pricing, production levels, and sales strategies, as it provides insight into how much money is left from sales to cover fixed costs and generate profit.