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Skip top navigationcapstone logoWelcome back Emily O'Connell. | Industry ID : C 1 5 2 2 7 1 | Title: ( 2 4 FS -
Skip top navigationcapstone logoWelcome back Emily O'Connell. Industry ID : C Title: FSFull BUSINESS STRATEGY
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Margin Analysis
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 of the Capstone Courier for Round
The Segment Analysis reports pages of the Capstone Courier for Round
Determining Current Margin
SituationAnalysisMargin
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 Material Cost Labor Cost
Margin Percentage Contribution MarginPrice
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 YN Then, use the values you entered to calculate the Contribution Margin and the Margin Percentage.
Incomplete
Current Margin
Product Name Price Material Cost Labor Cost Second Shift YN Contribution Margin $ Contribution Margin
Traditional
Eat
N
Incorrect value entered
Low End
Ebb
Y
High End
Echo
N
Performance
Edge
N
Size
Egg
N
The Round Capstone Courier
Determining Margin Potential
Finding the maximum amount of profit you can generate from one unit of a product is called Margin Potential. This is useful for a company when making
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