Gross Margin calculator measures profitability by comparing production costs to revenue. Calculator requires cost inputs (direct and indirect expenses) and revenue. Gross Margin shows percentage of revenue remaining after COGS
Gross profit equals total sales revenue minus cost of goods sold. Sales revenue refers only to product sales, not fixed assets. Formula: Total sales revenue - Cost of sales
Fixed costs remain constant regardless of production volume. Variable costs fluctuate with production volume. Fixed costs are not related to production volume. Variable costs show linear relationship with production volume
Price is the quantity of payment for goods or services. Prices can be expressed in currency, quantities, or vouchers. Modern prices are typically quoted in currency units
AFC represents fixed costs that remain constant regardless of production volume. Calculated by dividing total fixed costs by total production output. Common fixed costs include rent, salaries, taxes, utilities, and insurance
Traditional material selection methods have limitations in competitive markets. 80% of manufacturing costs are locked in at conceptual design stage. Material shortages and regulations force companies to consider new options