Contribution Margin Accounting
You can use the results of product costing in Profitability Analysis to carry out contribution margin accounting for each product.
The quantities sold in the accounting period can be valuated with the costs calculated by the cost estimate to determine the cost of sales for each product. The cost of sales is compared with the sales revenues to determine a contribution margin for each product.
Profitability Analysis accesses quantity fields and value fields. Here, the quantity field contains the sales volume. The value fields contain values from the cost estimate (such as the cost of goods manufactured, sales and administration costs) and values from the sales system (billing documents).
Contribution margins can be calculated on the basis of the following costs:
Marginal costs are cost components that are flagged as variable costs in the cost component structure.
Full costs are the fixed costs plus the variable costs.
Production variances are calculated in Product Cost Controlling and are settled to Profitability Analysis.
For short-term profit/loss cost accounting, you have various analytical options, such as analyzing contribution margins, sales figures, and operating profits by product group, division, sales quantity and market segment, and profit center.
See also:Profitability Analysis: