If 2,000 units remain unsold at the end of the month and sales total $300,000 for the month, the amount of manufacturing margin that would be reported on the variable costing income statement is 140,000.
The manufacturing margin is the difference between sales revenue and the variable cost of goods sold. It is calculated at variable cost.
The average producer gross manufacturing margin ranges between 25 and 35%. However, items with higher prices, such as RVs, cars, and even homes, only increase in price by 10-15%.
divide your gross profit by your sales. Multiply the total by 100 and voila, you get your margin percentage. The margin formula measures how much you keep in each dollar of sales after your expenses are paid. The higher the profit, the higher the percentage of revenue you keep on the sale.
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