How cost based pricing or Marginal pricing maximizes Profit

Dear Mathew 

Please correct me if I am wrong

Total Contibution margin = Total Revenue - Total Variable cost

Unit Contribution margin = Unit Price(Unit Revenue) - Unit Variable Cost

The equation revenue-variable cost/revenue is the ratio of contribution margin to revenue.

Contribution margin can be thought of as the fraction of sales that contributes to the offset of fixed costs. Alternatively, unit contribution margin is the amount each unit sale adds to profit: it's the slope of the Profit line.


www.alokroutray.blogspot.com

Nice work Mathew sir and good comment Alok sir,
Yes profit is maximized at that level when marginal revenue equals marginal cost, provided certain conditions are satisfied.  After that level margin cost is higher than marginal revenue. So it gives the highest possible total revenue under a given set of conditions. 
I agree with alok sir this is not practically viable for all to follow this model. Ultimately it is the supply and demand interplay that determines And market skimming is employed in the case of products like  mobile phones etc.
But sir how is contribution margin which is equal to (revenue – variable cost) / revenue 
Contribution margin is = X(V-F) – total variable cost
Where Variable cost is V and fixed cost is F then product cost = V+F.

All your equations are very perfect, but all these work under ideal conditions,i.e.,Ceteris Paribus, where everything is constant except price. Price alone cannot describe the marginal utility of a product which is directly proportional to profit. 
In my opinion price should be decided upon consumer willingness to pay and demand for the product.One should try to be a monopolist in a market by differentiating his /her product from its competitors.

Cost based pricing and marginal pricing can be fruitful in some context like industial products and operating supplies. But it will be the worst if it is used for any consumer products especially in a oligopoly market which is flodded with competetion.