Margin Analysis

Managerial accounting handles margin analysis, the amount of profit or cash flow generated by the sale from a specific product, customer, store or region. Margin analysis involves analyzing the incremental benefit attained by increased production and flows into breakeven analysis. Breakeven analysis involves calculating the contribution margin on the sales mix to determine the unit volume at which the business’ gross sales equal total expenditures. This information calculated by managerial accountants is useful for determining price points for products and services.