When accounting for manufacturing companies, each production job within the business has a gross margin, which is the difference between the selling price and the product manufacturing cost of the job. The gross margin is used to calculate the gross margin percentage.
This small manufacturing business gross margin percentage calculator will help you to estimate the gross margin percentage of typical jobs for use in the Financial Projections Template.
If your business has multiple products then use the calculator for each type of production job and then average the margin using our weighted average gross margin calculator.
The Excel sheet, available for download below, helps manufacturing businesses calculate the production gross margin percentage.
The calculator is used by entering the number of units for the job followed by details of each type of cost. In particular, setup cost, direct materials, and direct labor, are entered both in quantity and rate terms.
Factory overheads are allocated to the job at a predetermined rate based on the number of labor hours involved in setup and direct labor. Costs per unit are shown by way of information.
On entering the unit selling price, the gross margin % and the markup % for the job are calculated for each production job.
Manufacturing Gross Margin Percentage Calculator Download
The manufacturing gross margin percentage calculator is available for download in Excel format by following the link below.
Users use this manufacturing business plan template at their own risk. We make no warranty or representation as to its accuracy and we are covered by the terms of our legal disclaimer, which you are deemed to have read. This is an example of a manufacturing product margin calculator format that you might use. It is purely illustrative. This is not intended to reflect general standards or targets for any particular company or sector. If you do spot a mistake in the manufacturing margin calculator, please let us know and we will try to fix it.
About the Author
Chartered accountant Michael Brown is the founder and CEO of Plan Projections. He has worked as an accountant and consultant for more than 25 years and has built financial models for all types of industries. He has been the CFO or controller of both small and medium sized companies and has run small businesses of his own. He has been a manager and an auditor with Deloitte, a big 4 accountancy firm, and holds a degree from Loughborough University.