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40 missed units at a 25 price
You missed 40 units. The price is 25, and the variable cost is 14. Those three numbers are an example. SBA does not publish a stockout count, and Publication 334 does not set a unit cost.
Missed units: 25% lower
Change missed units to 30 units while keeping the other example values the same.
Missed units: 25% higher
Change missed units to 50 units while keeping the other example values the same.
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Quick answer
What does the Stockout lost margin calculate?
What margin do the units you could not sell give up? This calculator uses missed units, unit price, and variable cost per unit to estimate margin on units you did not sell immediately in your browser.
With the values currently entered, the result is $440.00 — margin on the missed units. It also shows contribution per unit, missed receipts, variable cost not incurred, and margin on the price.
How to use the Stockout lost margin
- Replace the example values with your own numbers.
- Review the result and supporting figures as they update automatically.
- Check the formula and assumptions before using the estimate for a decision.
Inputs used
- Missed units — entered in units
- Unit price
- Variable cost per unit
Stockout lost margin formula
Lost margin = missed units × (unit price - variable cost). That unit gap is the contribution margin.
Assumptions
- SBA defines contribution margin as the price minus the cost to make the product. IRS Publication 334, chapter 7, figures gross profit as net receipts minus cost of goods sold. The receipts you miss are the units times the price. The cost you do not incur is the units times the variable cost. Lost margin is the difference.
- The price and the variable cost are amounts you type. Publication 334 does not publish a stockout count. Expediting and a customer who does not come back sit outside this figure.
Verify the inputs
Authoritative sources
These sources explain the definitions, factors, or rules behind this tool. Their geographic scope is shown because an official source for one country is not automatically valid somewhere else.
Defines contribution margin as the difference between price and the cost to make the product, and writes the ratio as (price − variable cost) ÷ price.
Figuring gross profitUS Internal Revenue Service — Publication 334Scope: US Schedule C small-business tax guide; method is generalChapter 7 figures gross profit as net receipts minus cost of goods sold. It then tests accuracy as that profit divided by net receipts, compared with the markup policy.
Sources do not endorse Calculum. Check the source date, scope, and your own documents before making a financial, tax, insurance, or reporting decision.
Practical guide
Stockout lost margin example and edge cases
A stockout lost margin is the gross profit on units you could not sell. SBA calls the gap between price and the cost to make the product the contribution margin. You multiply that gap by the units you missed.
Example: 40 missed units at a 25 price
You missed 40 units. The price is 25, and the variable cost is 14. Those three numbers are an example. SBA does not publish a stockout count, and Publication 334 does not set a unit cost.
- Missed units
- 40 units
- Unit price
- 25
- Variable cost per unit
- 14
Calculated result$440.00margin on the missed units
The unit gap is 11, so 40 units give up 440. The missed receipts are 1,000, and the variable cost you do not incur is 560. The 11 is 44 percent of the 25 price.
Example results use the default display profile. The calculator above follows your selected country and units.
How to read the result
- Read the 440 first. It is 40 times 11. The 11 is 25 minus 14.
- Publication 334 compares gross profit with net receipts. Here the receipts never arrive, so the 440 is profit you do not book. A higher variable cost shrinks the 11.
Edge cases worth checking
The variable cost is above the price
A 30 cost on a 25 price makes the unit gap negative. Forty units then show -200, because selling them would have lost money. The page still multiplies. You decide whether those units were worth stocking.
A backorder will still ship
A backorder that you still fill is not a lost sale. Leave those units out of the 40, or the 440 counts profit you will still collect. The 40 is only the demand you will not fill.
What changes the result most
Missed units
Use the count you expect in real life. Round up when a partial units cannot be purchased or used.
Unit price
Use a current amount for unit price. Include fees or recurring costs that belong in the same figure.
Variable cost per unit
Use a current amount for variable cost per unit. Include fees or recurring costs that belong in the same figure.
Try a different scenario
Small changes show whether the answer is stable or sensitive.
Missed units: 25% lower
30 units$330.00margin on the missed units
Missed units: 25% higher
50 units$550.00margin on the missed units
Unit price: 25% higher
31$680.00margin on the missed units
Common mistakes
Check missed units
SBA defines contribution margin as the price minus the cost to make the product. IRS Publication 334, chapter 7, figures gross profit as net receipts minus cost of goods sold. The receipts you miss are the units times the price. The cost you do not incur is the units times the variable cost. Lost margin is the difference. Make sure this matches the number you enter.
Keep variable cost per unit consistent
The price and the variable cost are amounts you type. Publication 334 does not publish a stockout count. Expediting and a customer who does not come back sit outside this figure. Use the same units and time period throughout the calculation.
Do not rely on one stockout lost margin scenario
Run a cautious case and an optimistic case. The range is often more useful than one exact-looking number.
Use this result well
What margin do the units you could not sell give up?
It does not replace a quote, contract, accountant, or local employment guidance.