Contribution Margin - refers to the simple margin taking into account the "last" margin to an external customer. Firstly the material sold to a specific customer is identified. Thereafter the CM takes the cost to produce this material and based on this unit cost the calculation of the variable "Costs of Goods Sold" is possible. After the CM taking into consideration any transport costs that are linked with the given customer/material combination. The Contribution Margin is thus = Sales - Transport Costs - Cost of Goods Sold variable.
Integrated Margin - refers to the margin of the whole chain of internal sales, production and external sales. The calculation will identify where the product was produced and will take the variable "Unit Production Costs" from the origin to valorize and calculate the "Costs of Goods Sold" within a legal entity, and based on the quantities sold. This way it excludes any internal margin made (based on the transfer pricing) and therefore do not account for the fixed production costs.
Integrated (Market) Margin - refers to the Integrated Margin explained above however the variable "Cost of Goods Sold" are linked to market prices of raw materials and not the internal purchasing prices.
