Contribution
Contribution is what is left from the selling price of one unit after subtracting its variable costs. That amount goes toward covering fixed costs and, after that, profit.
Also known as: contribution margin, contribution per unit
Contribution per unit equals the selling price minus the variable cost of that unit. For example, an item sold for $8 with $4 of variable cost contributes $4.
Dividing monthly fixed costs by the contribution per unit gives the number of units needed to cover those costs. A lower price reduces contribution, so more units are needed.