(Solved): Margin Analysis Being able to calculate a healthy Margin Analysis will help the Research \& Develop ...

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 * The product details are for example enly. Your product names and data may differ, but the process to calculate margins is identical, Useful formulas: Contribution Margin(S) = 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 shitt was used (Y/N). Then, use the values you entered to calculate the Contribution Margin and the Margin Percentage. 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 calculato Margin Potentiaf as: Minimum Labor Cost \( =[\$ 11.20-(1.12 \) " Automation Ratings Below) \( ]+ \) \( 1.12 \)