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The mysterious and elusive CONTRIBUTION MARGIN

  • 1.  The mysterious and elusive CONTRIBUTION MARGIN

    Posted May 09, 2019 03:36 PM
    Does anyone use contribution margin sales price - material costs

    If so how to you get it?

    Maggie Dominguez
    Business Systems Analyst
    Inolex Chemical Co.
    Philadelphia PA

  • 2.  RE: The mysterious and elusive CONTRIBUTION MARGIN

    Posted May 10, 2019 01:04 PM
    If you're talking about sales pricing, we're using the 2009 version of it. If you're talking about applying something like fixed costs to materials thru costing sheet, that's a different answer.

    There's a couple of way's to apply it. We assign the Sales price models Contribution (vs Markup) to the item master. We use Unit cost ​price (not purchase, because there can be fluctuations from purchasing an we always update our purchase price record). Also, we have policies regarding changes to standard cost. The ratio is set according to product line, so we correlate the Line discount group with the ratio value (but there's no real connection between them) - this is just our way of keeping track of things.

    The way it works is that when we create a new pending cost version record for an item, the pending sale price cost version record is auto-created base on above settings. The cost version defines whether to auto-create the record. The record needs to be activated to be available to sales orders. It's a manual process.

    If we need to update records en masse, we upload from excel into the pending prices table.

    Mark Prouty
    Programmer / Analyst
    ANGI Energy Systems
    Janesville WI

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