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Methodology

SKU Contribution Ranking Planner methodology

Rank two SKUs by retained contribution after variable cost and returns, not revenue alone.
Duc Nguyen X.By Duc Nguyen X.· Founder, Margin101Last reviewed: View update historyMethodology

Educational only: Business decision support, not accounting, tax or legal advice.

Privacy: Calculations run locally; Margin101 does not receive your commercial inputs.

Update policy: Reviewed when formulas or official dependencies change.

Scope: Market-neutral small-business planning using your own assumptions.

1. Formulas and units

Sku AContribution Ex Tax
skuAContributionExTax = A units × A retained unit contribution

Where

skuAUnits
SKU A units (operational units)Source: Business record
skuBUnits
SKU B units (operational units)Source: Business record
skuAContributionExTax
Sku AContribution Ex Tax (currency units, ex tax)Source: Calculated output
skuAContributionPerUnitExTax
Sku AContribution Per Unit Ex Tax (currency units, ex tax)Source: Calculated output
Sku BContribution Ex Tax
skuBContributionExTax = B units × B retained unit contribution

Where

skuAUnits
SKU A units (operational units)Source: Business record
skuBUnits
SKU B units (operational units)Source: Business record
skuBContributionExTax
Sku BContribution Ex Tax (currency units, ex tax)Source: Calculated output
skuBContributionPerUnitExTax
Sku BContribution Per Unit Ex Tax (currency units, ex tax)Source: Calculated output
Sku AContribution Per Unit Ex Tax
skuAContributionPerUnitExTax = A retained revenue − A variable cost

Where

skuAUnitCostExTax
SKU A variable cost (currency units, ex tax)Source: Business record
skuAUnits
SKU A units (operational units)Source: Business record
skuBUnitCostExTax
SKU B variable cost (currency units, ex tax)Source: Business record
skuBUnits
SKU B units (operational units)Source: Business record
skuAContributionExTax
Sku AContribution Ex Tax (currency units, ex tax)Source: Calculated output
skuAContributionPerUnitExTax
Sku AContribution Per Unit Ex Tax (currency units, ex tax)Source: Calculated output
Sku BContribution Per Unit Ex Tax
skuBContributionPerUnitExTax = B retained revenue − B variable cost

Where

skuAUnitCostExTax
SKU A variable cost (currency units, ex tax)Source: Business record
skuAUnits
SKU A units (operational units)Source: Business record
skuBUnitCostExTax
SKU B variable cost (currency units, ex tax)Source: Business record
skuBUnits
SKU B units (operational units)Source: Business record
skuBContributionExTax
Sku BContribution Ex Tax (currency units, ex tax)Source: Calculated output
skuBContributionPerUnitExTax
Sku BContribution Per Unit Ex Tax (currency units, ex tax)Source: Calculated output
Sku ARank
skuARank = descending rank by total contribution

Where

skuAUnits
SKU A units (operational units)Source: Business record
skuBUnits
SKU B units (operational units)Source: Business record
skuARank
Sku ARank (units)Source: Calculated output

Money inputs and outputs use the currency selected in the scenario without changing the canonical methodology. Rates, margins, utilisation and buffers are entered as percentages and converted to decimal values for calculation.

2. Worked example

Input assumptions

The worked rows below come directly from the registered engine and visible default fixture.

Calculation and outputs

Example

The worked rows below come directly from the registered engine and visible default fixture.

Sku AContribution Ex Tax
22,500 currency units
Sku BContribution Ex Tax
26,400 currency units
Sku AContribution Per Unit Ex Tax
45 currency units
Sku BContribution Per Unit Ex Tax
33 currency units
Sku ARank
2

The exact engine-derived outputs are shown in the labelled rows below.

Interpretation

SKU A contribution and the paired ranking compare retained contribution after variable cost and returns, rather than revenue alone.

3. Validation and boundary checks

  • All values must be finite and inside the visible validation boundaries.
  • Rates are entered as percentages and calculations retain decimal precision.
  • Money uses one consistent ex-tax currency and planning period.

4. Assumptions and source classification

  • Provider fees, exchange rates, return behaviour and operating performance are user-entered scenarios.
  • No provider plan, jurisdiction, tax rate or market benchmark is embedded.
  • The engine retains full precision and display formatting never feeds back into calculation.

This planner has no current policy-data dependency. Its commercial assumptions are user supplied. Registered family-level regression suites exercise the shared business-logic engine and worked-result reconciliation.

5. Limitations

  • The model does not forecast demand, provider changes, exchange rates or operational performance.
  • It does not replace accounting, tax, legal or financial advice.

This is educational decision support, not tax, accounting, legal or financial advice. Check the treatment of your actual transactions under the rules that apply to your business and seek qualified advice where appropriate.

6. Update and evidence policy

Registered family-level suites test formula invariants and example reconciliation; the release ledger records that coverage without claiming a separate oracle for every line of public copy. There is no official threshold or benchmark to refresh for this planner. Commercial inputs remain user-supplied because they vary by business and contract.

Change history

  1. : Initial public release of the planner and methodology after pre-launch calculation, content, source and interaction review.

Related reading

Guides to interpret the decision and its assumptions.

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