Act on the result
Use fully allocated product profit together with avoidable profit to decide whether to keep, reprice or discontinue the product.
Educational only: Business decision support, not accounting, tax or legal advice.
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Update policy: Reviewed when formulas or official dependencies change.
Scope: Market-neutral small-business planning using your own assumptions.
What this diagnostic helps you decide
Best for
Owners separating product contribution from avoidable and allocated profit.
Outputs
Contribution, avoidable profit, fully allocated profit and margins.
Start here
Classify avoidable fixed cost separately from shared allocations before comparing products.
Use a different tool when: Do not use this to identify which operating-cost layer changes profit after gross profit; use Gross to Operating Profit Bridge for that decision. Use this tool to diagnose product profitability by cost layer.
Profit & break-even
Product Profitability: contribution
Contribution, avoidable profit, fully allocated profit and margins.
Amounts use the same currency as your inputs. No currency conversion is performed.
Product Profitability Diagnostic
Separate contribution, avoidable profit and fully allocated profit for one product.
Your numbers stay in this browser
Revenue attributed to the product. Use one consistent ex-tax monetary basis.
Costs that vary with product sales. Use one consistent ex-tax monetary basis.
Fixed costs removed if the product stops. Use one consistent ex-tax monetary basis.
Planning allocation kept distinct from avoidable costs. Use one consistent ex-tax monetary basis.
Decision result
Each output is bound to its own registered engine formula step.
PDF and CSV exports stay on this device. Clean page links contain no inputs.
- Fully allocated product profit
- 55,000.00
- Contribution Ex Tax
- 130,000.00
- Avoidable Profit Ex Tax
- 80,000.00
- Contribution Margin
- 52%
- Fully Allocated Margin
- 22%
Scenario comparison
Each row names the assumption axis changed from the baseline.
ScenarioResultDifference
Current scenario55,000.00Baseline
Lower Product revenue42,500.00-12,500.00
Higher Product revenue67,500.0012,500.00
Save these results, change an input, then compare the updated figures with this baseline.
The baseline is temporary in this tab and is not added to shared scenario links or generated reports.
Calculation details
View calculation detailsView the formulas and inputs used for these results.
Fully allocated product profit
Fully Allocated Profit Ex Tax
avoidable profit − allocated shared costs55,000.00Result55,000.00
Reports money for the entered planning period using the declared ex-tax revenue, cost and capacity basis. The engine retains full precision; only presentation is rounded.
Product Profitability Diagnostic formulas →Inputs used by these formula steps
- Fully Allocated Profit Ex TaxProduct Revenue Ex Tax
- 250,000
- Fully Allocated Profit Ex TaxProduct Variable Costs Ex Tax
- 120,000
- Fully Allocated Profit Ex TaxProduct Avoidable Fixed Costs Ex Tax
- 50,000
- Fully Allocated Profit Ex TaxAllocated Shared Costs Ex Tax
- 25,000
Contribution Ex Tax
Contribution Ex Tax
product revenue − variable costs130,000.00Result130,000.00
Reports money for the entered planning period using the declared ex-tax revenue, cost and capacity basis. The engine retains full precision; only presentation is rounded.
Product Profitability Diagnostic formulas →Inputs used by these formula steps
- Contribution Ex TaxProduct Revenue Ex Tax
- 250,000
- Contribution Ex TaxProduct Variable Costs Ex Tax
- 120,000
- Contribution Ex TaxProduct Avoidable Fixed Costs Ex Tax
- 50,000
- Contribution Ex TaxAllocated Shared Costs Ex Tax
- 25,000
Avoidable Profit Ex Tax
Avoidable Profit Ex Tax
contribution − avoidable fixed costs80,000.00Result80,000.00
Reports money for the entered planning period using the declared ex-tax revenue, cost and capacity basis. The engine retains full precision; only presentation is rounded.
Product Profitability Diagnostic formulas →Inputs used by these formula steps
- Avoidable Profit Ex TaxProduct Revenue Ex Tax
- 250,000
- Avoidable Profit Ex TaxProduct Variable Costs Ex Tax
- 120,000
- Avoidable Profit Ex TaxProduct Avoidable Fixed Costs Ex Tax
- 50,000
- Avoidable Profit Ex TaxAllocated Shared Costs Ex Tax
- 25,000
Contribution Margin
Contribution Margin
contribution / product revenue0.52 percentResult52%
Reports percent for the entered planning period using the declared ex-tax revenue, cost and capacity basis. The engine retains full precision; only presentation is rounded.
Product Profitability Diagnostic formulas →Inputs used by these formula steps
- Contribution MarginProduct Revenue Ex Tax
- 250,000
- Contribution MarginProduct Variable Costs Ex Tax
- 120,000
- Contribution MarginProduct Avoidable Fixed Costs Ex Tax
- 50,000
- Contribution MarginAllocated Shared Costs Ex Tax
- 25,000
Fully Allocated Margin
Fully Allocated Margin
fully allocated profit / product revenue0.22 percentResult22%
Reports percent for the entered planning period using the declared ex-tax revenue, cost and capacity basis. The engine retains full precision; only presentation is rounded.
Product Profitability Diagnostic formulas →Inputs used by these formula steps
- Fully Allocated MarginProduct Revenue Ex Tax
- 250,000
- Fully Allocated MarginProduct Variable Costs Ex Tax
- 120,000
- Fully Allocated MarginProduct Avoidable Fixed Costs Ex Tax
- 50,000
- Fully Allocated MarginAllocated Shared Costs Ex Tax
- 25,000
Inputs used
- Product revenue
- 250,000.00
- Product variable costs
- 120,000.00
- Avoidable fixed costs
- 50,000.00
- Allocated shared costs
- 25,000.00
Open this calculator with preset values
This calculator supports documented, shareable scenario URLs. Compatible assistants and applications can construct links using the parameters below.
Scenario links contain only allowlisted numeric and closed-choice inputs shown in the URL; Margin101 excludes free text and identifying fields. Anyone you share the URL with can read those numbers, so do not include private or identifying data.
| Parameter | Meaning | Unit | Allowed values | Presence | Default |
|---|---|---|---|---|---|
| allocatedSharedCostsExTax | Planning allocation kept distinct from avoidable costs. Use one consistent ex-tax monetary basis. | currency units/planning period, ex tax | 0 to 100000000 | Required | 25000 |
| productAvoidableFixedCostsExTax | Fixed costs removed if the product stops. Use one consistent ex-tax monetary basis. | currency units/planning period, ex tax | 0 to 100000000 | Required | 50000 |
| productRevenueExTax | Revenue attributed to the product. Use one consistent ex-tax monetary basis. | currency units/planning period, ex tax | 0 to 100000000 | Required | 250000 |
| productVariableCostsExTax | Costs that vary with product sales. Use one consistent ex-tax monetary basis. | currency units/planning period, ex tax | 0 to 100000000 | Required | 120000 |
Product Profitability: contribution
Fully allocated product profit keeps contribution, avoidable fixed costs and shared allocations visible as separate decision layers.
Formula summary
- Primary formula
- fully allocated profit = revenue − variable costs − avoidable fixed costs − shared allocation
Data used here
- The estimate uses your inputs and the general business formula documented in the methodology.
Decision checks
Stress-test the decision
Retest avoidable fixed costs and allocated shared costs in currency units for the same product reporting period, ex tax.
When this estimate can be misleading
- Results depend on complete, consistently classified inputs.
- Demand, timing, quality and strategic fit remain separate decisions.
- This is educational business decision support, not accounting, tax, legal or financial advice.
- Fully allocated product profit keeps contribution, avoidable fixed costs and shared allocations visible as separate decision layers.
Educational estimate, not advice. See all assumptions & limitations →
Related reading
Guides to interpret the decision and its assumptions.
- Where Did the Margin Go? A Margin-Compression Diagnostic
Reconcile price, mix, cost, waste, fee and allocation effects before choosing an action, while keeping residuals and causation limits visible.
Read guide
Frequently asked questions
How do I diagnose product profitability by cost layer?
Use fully allocated product profit together with avoidable profit to decide whether to keep, reprice or discontinue the product.
What should I investigate after the diagnostic?
Use the diagnostic to identify which record or operating driver needs investigation; it does not establish the cause by itself.