G Contribution Margin ($) Contrit X Margin Analysis | Capsim Porta X B Login - Benedictine University X Homework Help - Q&A from Or X + - > C ww3.capsim.com/student/portal/index.cfm?template=gettingStarted. SituationAnalysis. MarginAnalysis Q u x Exams [ Comp-XM The product details are for example only. Your product names and data may differ, but the process to calculate margins is identical. Useful formulas: Contribution Margin($) = Price - (Material Cost + Labor Cost) Margin Percentage (%) = Contribution 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. Incomplete Current Margin Product Name Price Material Cost Labor Cost Second Shift (Y/N) Contribution Margin ($) Contribution Margin (%) Traditional Eat 28.00 11.59 7.49 8.92 31.86 Low End Ebb 21.00 7.81 7.12 6.07 28.90 High End Echo 38.00 15.98 8.57 13.45 35 Performance Edge 33.00 15.87 8.57 N 8.56 26 Size Egg 13.62 8.57 10.81 33 The Round 0 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 a decision about whether to go into production or not. In its simplest form, you can calculate Margin Potential as: Margin Potential = Maximum Price - Minimum Unit Costs Price Use the information table below to find the maximum price that customers deem acceptable. You can find this in the Customer Buying Criteria for each segment Minimum Material Cost Minimum Labor Cost Calculate the minimum Material Cost per segment using the following Calculate the minimum Labor Cost for each segment. Assume a base equation and table below: labor cost of $11.20 ($11.20 is a rough estimate of labor cost used solely to illustrate the Margin Potential Concept). Minimum Material Cost = [(Lowest Acceptable MTBF * 0.30) / 1000] + Trailing Edge Position Cost Minimum Labor Cost = [$11.20 - (1.12 * Automation Ratings Below)] + 1.12 Customer Segment Information Trailing Edge Material Leading Edge Material Lowest Acceptable Maximum Automation Level (out Cost Cost MTBF Price of 10) Traditional $3.80 $7.80 14,000 $30.00 8.0 Low End $1.00 $5.00 12,000 $25.00 10.0 High End $6.00 $10.00 20,000 $40.00 5.0 Performance $4.50 $8.50 22,000 $35.00 6.0 Size $4.50 $8.50 16,000 $35.00 60 Margin Potential Maximum Minimum Material Minimum Labor Contribution Margin Contribution Margin Product Name Price Cost Cost ($) %) Traditional Eat |30 3.36 Low End Ebb 25 4.6 1.12 value entered High End Echo 40 12 6.72 COOKIE SETTINGS Performance 11.1 A Edge 35