Enter the total revenue ($) and the total direct costs ($) into the Direct Margin Calculator. The calculator will evaluate and display the Direct Margin.
Direct Margin Formula
The following formula is used to calculate the Direct Margin.
DM = (TR-DC) / TR *100
- Where DM is the Direct Margin (%)
- TR is the total revenue ($)
- DC is the total direct costs ($)
How to Calculate Direct Margin?
The following example problems outline how to calculate Direct Margin.
Example Problem #1:
- First, determine the total revenue ($).
- The total revenue ($) is given as: 600.
- Next, determine the total direct costs ($).
- The total direct costs ($) is provided as: 300.
- Finally, calculate the Direct Margin using the equation above:
DM = (TR-DC) / TR *100
The values given above are inserted into the equation below and the solution is calculated:
DM = (600-300) / 600 *100 = 50 (%)
Example Problem #2:
For this problem, the variables required are provided below:
total revenue ($) = 700
total direct costs ($) = 300
Test your knowledge using the equation and check your answer with the calculator above.
DM = (TR-DC) / TR *100 = ?
