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 4) of the Capstone Courier for Round O The Segment Analysis reports (pages 5-9) of the Capstone Courier for Round O Determining Current Margin Units Size Name Able Acre Adam Aft Agape Primary Segment Trad Low High Pimn Size Sold 999 1,763 366 358 314 Unit Inven Age Pfmn tory_Revision Date_Dec 31 MTBF Coord 189 11/21/2010 3.1 17500 5.5 39 5/25/2009 4.6 14000 3.0 40 4/18/2012 1.7 23000 8.0 78 6/30/2011 25 25000 9.4 62 5/25/2011 26 19000 4.0 Coord Price 14.5 $28.00 17.0 $21.00 12.0 $38.00 15.5 $33.00 11.0 / $33.00 Material Cost $11.59 $7.81 $15.98 $15.87 $13.62 Labor Cost $7.49 $7.12 $8.57 $8.57 $8.57 Contr. Marg 29% 27% 33% 23% 30% 2nd Shift & Over- time 0% 30% 0% 0% 0% Auto mation Next Round 4.0 5.0 3.0 3.0 3.0 Capacity Next Plant Round Utiliz. 1.800 66% 1,400 129% 900 45% 600 73% 600 63% * The product details are for example only. Your product names and data may differ, but the process to calculate margins is identical. Useful formulas: Useful formulas: Contribution Margin($) = 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 Able 0 Incorrect value entered Low End Acre 0 Incorrect value entered High End Adam Performance Aft Size Agape The Round 0 Capstone Courier