(Answered) : I need help with the margin potential table at the bottom,


QUESTION :

I need help with the margin potential table at the bottom, pictures that go with table posted below.

Don't use plagiarized sources. Get Your Custom Essay on
(Answered) : I need help with the margin potential table at the bottom,
Just from $13/Page
Order Essay

I need help with the margin potential table at the

Margin Analysis

Healthy margins, the difference between a product’s manufacturing cost and its price, are critical to company success. The Margin Analysis will help the Research & Development Department understand the cost of material, and the Production Department understand the effect automation has on labor costs. It will also demonstrate to the Marketing Department the importance of adequate pricing, and to the Finance Department the upper limits of profitability.

You will need:

The Production Analysis report (page 4) of the Capstone Courier for Round 0 (Pictures of pages posted above)

The Segment Analysis reports (pages 5-9) of the Capstone Courier for Round 0 (Pictures of pages posted above)

Determining Current Margin

In this activity you will calculate the Contribution Margin in dollars per unit and as a percentage of the price using the information in the Production Analysis report

marginAnalysisImg.png

* 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 Margins Activity

In the table below enter each product’s price, material cost, labor cost, 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
Product Name Price Material Cost Labor Cost Second Shift (Y/N) Contribution Margin ($) Contribution Margin (%)
Traditional Able 28 11.59 7.49 N 8.92 32
Low End Acre 21 7.81 7.12 Y 6.07 29
High End Adam 38 15.98 8.57 N 13.45 35
Performance Aft 33 15.87 8.57 N 8.56 26
Size Agape 33 13.62 8.57 N 10.81 33
Determining Margin Potential

Finding the maximum amount of profit you can get from one unit of a product is called Margin Potential. It’s useful for a company when making a decision about whether to go into production or not. In it’s simplest form, it is calculated as:

Margin Potential = Maximum Price possible – Minimum Unit Costs possible

Price

Go to the Buying Criteria on the Segment Analysis pages of The Capstone Courier for Round 0 to find the maximum permitted price for each segment (pictures of pages posted above)

Minimum Material Cost

Calculate the minimum Material Cost per segment using the following equation and table below:

Minimum Material Cost = [(Lowest Acceptable MTBF * 0.30) / 1000] + Trailing Edge Position Cost

Material Position Component Costs
Trailing Edge Cost Leading Edge Cost
Traditional $3.80 $7.80
Low End $1.00 $5.00
High End $6.00 $10.00
Performance $4.50 $8.50
Size $4.50 $8.50
Minimum Labor Cost

Calculate the minimum Labor Cost for each segment. Assume a base labor cost of $11.20 ($11.20 is a rough estimate of labor cost used solely to illustrate the Margin Potential Concept).

Minimum Labor Cost = [$11.20 – (1.12 * Automation Ratings Below)] + 1.12

Segment Automation level (out of 10)
Traditional Automation 8.0
Low End Automation 10.0
High End Automation 5.0
Performance Automation 6.0
Size Automation 6.0
Margin Potential
Product Name Maximum Price Minimum Material Minimum Labor Contribution Margin ($) Contribution Margin (%)
Traditional Able
Low End Acre
High End Adam
Performance Aft
Size Agape View comments (1)

Expert Answer


Solution :

Order a unique copy of this paper
(550 words)

Approximate price: $22

Basic features
  • Free title page and bibliography
  • Unlimited revisions
  • Plagiarism-free guarantee
  • Money-back guarantee
  • 24/7 support
On-demand options
  • Writer’s samples
  • Part-by-part delivery
  • Overnight delivery
  • Copies of used sources
  • Expert Proofreading
Paper format
  • 275 words per page
  • 12 pt Arial/Times New Roman
  • Double line spacing
  • Any citation style (APA, MLA, Chicago/Turabian, Harvard)

Our guarantees

Delivering a high-quality product at a reasonable price is not enough anymore.
That’s why we have developed 5 beneficial guarantees that will make your experience with our service enjoyable, easy, and safe.

Money-back guarantee

You have to be 100% sure of the quality of your product to give a money-back guarantee. This describes us perfectly. Make sure that this guarantee is totally transparent.

Read more

Zero-plagiarism guarantee

Each paper is composed from scratch, according to your instructions. It is then checked by our plagiarism-detection software. There is no gap where plagiarism could squeeze in.

Read more

Free-revision policy

Thanks to our free revisions, there is no way for you to be unsatisfied. We will work on your paper until you are completely happy with the result.

Read more

Privacy policy

Your email is safe, as we store it according to international data protection rules. Your bank details are secure, as we use only reliable payment systems.

Read more

Fair-cooperation guarantee

By sending us your money, you buy the service we provide. Check out our terms and conditions if you prefer business talks to be laid out in official language.

Read more

Calculate the price of your order

550 words
We'll send you the first draft for approval by September 11, 2018 at 10:52 AM
Total price:
$26
The price is based on these factors:
Academic level
Number of pages
Urgency

Order your essay today and save 15% with the discount code ESSAYHELP