Marginal Profitability Analysis - Self Study
Marginal profitability analysis provides relevant decision information for setting prices, product design, and product profitability. Analysis of whether to open or close locations or divisions can also be done with marginal profitability analysis.

The course starts by defining marginal costs and marginal profits and then explains how to calculate marginal profitability. You will learn how to create cost-volume-profit (CVP) analyses and breakeven analysis. Marginal profitability is compared to traditional full absorption product costing or activity-based costing to identify the pros and cons of each method and when each is appropriate.

The course provides practical examples of making decisions with marginal profitability analysis. Examples include determining optimal production amounts and which products to promote. The final section explains how to calculate the change in profitability from a price increase and a price decrease. A worksheet template is provided for this analysis.

Course Publication Date: May 30, 2020

This course is available with NO ADDITIONAL FEE if you have an active self study membership or all access membership or can be purchased for $20.00!

Author:Rob Stephens
Course No:FIN-MARPROF-90020
Recommended CPE:2.00
Delivery Method:QAS Self Study
Level of Knowledge:Basic
Prerequisites:None
Advanced Preparation:None
Recommended Field of Study:Finance
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Learning Objectives
  • Explore the definitions of marginal costs and marginal profitability
  • Discover how to use a cost-volume-profit analysis and breakeven analysis
  • Identify the pros and cons of using marginal profitability analysis, activity-based costing, and traditional full absorption costing.
  • Explore the following keys factors to profitability: cannibalization, excess capacity, and step-fixed costs
  • Recognize the best uses for marginal profitability analysis

CPE Depot Inc. is registered with the National Association of State Boards of Accountancy (NASBA) as a sponsor of continuing professional education on the National Registry of CPE Sponsors. State boards of accountancy have final authority on the acceptance of individual courses for CPE credit. Complaints regarding registered sponsors may be submitted to the National Registry of CPE Sponsors through its website: www.nasbaregistry.org.

Sponsor Number: 109423

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