What is contribution margin scheme in SAP SRD-FIN-COR - FIN-Cost and Revenue?

SAP Term: contribution margin scheme

• Component: SRD-FIN-COR

• Component Name: FIN-Cost and Revenue

• Description: A structured business view of contribution margins. A contribution margin scheme is a specialization of a financial reporting structure.

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• Key Concepts: 
  Contribution margin scheme is a method of cost accounting used in SAP to analyze the profitability of individual products or services. It is based on the concept of contribution margin, which is the difference between the sales price and the variable costs associated with producing a product or service. This method allows companies to identify which products or services are most profitable and which ones are not. 
  
  How to use it: 
  In SAP, contribution margin scheme can be used to analyze the profitability of individual products or services. To do this, first enter the sales price and variable costs associated with each product or service into the system. Then, calculate the contribution margin for each product or service by subtracting the variable costs from the sales price. Finally, compare the contribution margins for each product or service to determine which ones are most profitable. 
  
  Tips & Tricks: 
  When using contribution margin scheme in SAP, it is important to remember that fixed costs are not taken into account when calculating contribution margins. Therefore, it is important to consider both variable and fixed costs when analyzing profitability. Additionally, it is important to remember that contribution margins can change over time due to changes in sales prices and variable costs. 
  
  Related Information: 
  Contribution margin scheme is part of the SRD-FIN-COR FIN-Cost and Revenue Accounting component in SAP. This component also includes other methods of cost accounting such as absorption costing and activity-based costing. Additionally, this component includes features such as cost center accounting and profitability analysis.