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ACC 202 module 3 SLP

# ACC 202 module 3 SLP - If I were in services where they run...

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ACC 202 Module 3- SLP The Contribution Margin Approach to Income Mellissa Gschwend TUIU

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How can a company benefit from contribution margin analysis? Contribution Margin analysis measures how growth in sales translates to growth in profits. This formula equates to the Total Contribution Margin (TCM) is Total Revenue (TR, or Sales) minus Total Variable Cost (TVC). The TCM will let you know if you are marking money or if you are losing money. So would my the 374 th Security Forces Squadron benefit from using these calculations. I would have to say it would be quite difficult for me to even find this out. We really don’t have revenue. Our unit is given money to function and we spend it. We don’t bring in a profit from any of the services we provide. We do have to create a budget with our fixed costs and variable costs. However, it is not calculated in this manner.
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Unformatted text preview: If I were in services where they run the bowling alley or the enlisted club I would be able to analyze that information. I decided to look at my private organization. I am a member of the Police Welfare Association. We have fundraisers to raise money to help bring up the morale of our airman. Each year we have a fundraiser at the Friendship festival it is kind of like an air show. Our private organization sells T-shirts and cakes for the event. We spend about \$3500 on supplies. We make about \$7500.00 in revenue. If we subtracted our revenue from the supplies we would have our TCM. Which would be about \$4000.00. Which would show us we should make money instead of lose money. I might not have covered the entire calculation by using my private organization. When arriving at the contribution margin you have to look at your variable and fixed costs....
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