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Analyze the contribution margin for Microsoft Corporation's software products division. Microsoft's software products division generated total revenues of $1.5 billion and incurred variable costs of

Analyze the contribution margin for Microsoft Corporation's software products division. Microsoft's software products division generated total revenues of $1.5 billion and incurred variable costs of $500 million. Calculate the contribution margin ratio and contribution margin per unit for each product line, including operating systems, productivity software, and cloud services. Interpret the contribution margin analysis results and discuss the implications for Microsoft's product portfolio management.

Product Line

Total Revenue ($)

Variable Costs ($)

Contribution Margin Ratio (%)

Contribution Margin per Unit ($)

Operating Systems





Productivity Software





Cloud Services





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