Answered step by step
Verified Expert Solution
Question
1 Approved Answer
Margin Analysis Being able to calculate a healthy Margin Analysis will help the Research & Development Department understand how to change the cost of material
Margin Analysis Being able to calculate a healthy Margin Analysis will help the Research & Development Department understand how to change the cost of material and the Production Department understand how to change the cost of labor. You will need: The Production Analysis report (page 4) of the Capstone Courier for Round 0 The Segment Analysis reports (pages 5-9) of the Capstone Courier for Round 0 Determining Current Margin 5.5 Primary Segment Trad Low High Pimn Size Unit Units inven Age Pfmn Size Sold tory_Revision Date_Dec 31 MTBF CoordCoord Price 999 189 11/21/2010 3.1 17500 14.5 $28.00 1.763 39 5/25/2009 4.6 14000 3.0 17,0 $21.00 366 40 4/18/2012 1.7 23000 8.0 12.0 $38.00 358 78 6/30/2011 25 25000 9.4 15.5 $33.00 62 5/25/2011 2.6 19000 11.0 $33.00 Name Able Acre Adam Aft Agape Material Labor Cost Cost $11.59 $7.49 $781 $7.12 $15.98 $8.57 $15.87 $8.57 $13.62 $8.57 Contr. Marg 29% 27% 33% 23% 30% 2nd Shift Auto & mation Over- Next time Round 0% 4.0 30% 0% 3.0 0% 3.0 0% 3.0 5.0 Capacity Next Plant Round Utiliz 1,800 66% 1,400 129% 900 45% 600 73% 600 63% 314 4.0 * The product details are for example only. Your product names and data may differ, but the process to calculate margins is identical. Useful formulas: Contribution Margin($) = Price -O (M rial Cost + Labor Cost) Margin Percentage (%) = Contribution Margin/Price Calculating Margin Activity In the table below enter each product's price, material cost, and labor cost found in your report, and note whether or not a second shift was used (Y/N). Then, use the values you entered to calculate the Contribution Margin and the Margin Percentage. Current Margin Material Cost Product Price Name Second Shift Labor Cost (Y/N) Contribution Margin (%) Contribution Margin ($) Traditional Able 0 Low End Acre 0 High End Adam Performance Aft Size Agape
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started