What is 'contribution margin II' in SAP CO-PA - Profitability Analysis?

contribution margin II - Overview

• Component: CO-PA

• Component Name: Profitability Analysis

• Description: The contribution of a product towards covering overhead.

contribution margin II - Details

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  Key Concepts: 
  Contribution Margin II is a component of SAP's CO-PA Profitability Analysis. It is a measure of the profitability of a product or service, calculated by subtracting all variable costs from the sales revenue. This measure is used to determine the profitability of a product or service, and can be used to compare different products or services. 
  
  How to use it: 
  Contribution Margin II can be used to compare the profitability of different products or services. It can also be used to identify areas where costs can be reduced in order to increase profitability. 
  
  Tips & Tricks: 
  When calculating Contribution Margin II, it is important to include all variable costs, such as materials, labor, and overhead. It is also important to ensure that all sales revenue is included in the calculation. 
  
  Related Information: 
  Contribution Margin II is related to other measures of profitability, such as Gross Profit Margin and Net Profit Margin. It can also be used in conjunction with other measures, such as Return on Investment (ROI), to gain a more comprehensive understanding of a product or service's profitability.