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 0 The Segment Analysis reports (pages 5-9) of the Capstone Courier for Round 0 Determining Current Margin 2nd Shift Unit Inven tory Contr. Marg, 299 Over- time Primary Segment Trad Low High Pfmn Units Sold 999 1.763 366 Name Able Acre Adam Aft Agape 189 39 Age Dec 31 MTBF 3.1 17500 4.6 14000 1.7 23000 25 25000 2.6 19000 Revision Date 11/21/2010 5/25/2009 4/18/2012 6/30/2011 5/25/2011 Auto mation Next Round 4.0 5.0 Pfmn Size Coord CoordPrice 5.5 14.5 $28.00 3.0 17.0 $21.00 8.0 12.0 $38.00 9.4 15.5 $33.00 4.0 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 $8.57 Capacity Next Plant Round Utiliz. 1.800 66% 1,400 129% 900 45% 600 73% 600 63% 27% 33% 239 40 358 78 62 300 OM * The above product details are for example only. Your product names and data may differ, but the process to calculate margins is identical. Useful formulas: Contribution Margin($) = 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 Material Cost Contribution Margin Product Traditional (S) Name Daze Dell Second Shift Labor Cost (Y/N) 10.11 Price 34 Contribution Margin (%) 20 16.7 7.1 Low End High End Dixie Performance Size Dot Dune The Round 0 Capstone Courier 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 0 The Segment Analysis reports (pages 5-9) of the Capstone Courier for Round 0 Determining Current Margin 2nd Shift Unit Inven tory Contr. Marg, 299 Over- time Primary Segment Trad Low High Pfmn Units Sold 999 1.763 366 Name Able Acre Adam Aft Agape 189 39 Age Dec 31 MTBF 3.1 17500 4.6 14000 1.7 23000 25 25000 2.6 19000 Revision Date 11/21/2010 5/25/2009 4/18/2012 6/30/2011 5/25/2011 Auto mation Next Round 4.0 5.0 Pfmn Size Coord CoordPrice 5.5 14.5 $28.00 3.0 17.0 $21.00 8.0 12.0 $38.00 9.4 15.5 $33.00 4.0 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 $8.57 Capacity Next Plant Round Utiliz. 1.800 66% 1,400 129% 900 45% 600 73% 600 63% 27% 33% 239 40 358 78 62 300 OM * The above product details are for example only. Your product names and data may differ, but the process to calculate margins is identical. Useful formulas: Contribution Margin($) = 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 Material Cost Contribution Margin Product Traditional (S) Name Daze Dell Second Shift Labor Cost (Y/N) 10.11 Price 34 Contribution Margin (%) 20 16.7 7.1 Low End High End Dixie Performance Size Dot Dune The Round 0 Capstone Courier