Contribution Margin Analysis at Boeing

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Contribution Margin Analysis at Boeing
ABSTRACT
This project discusses the financial analysis known as contribution margin analysis. The particular firm being examined is the Boeing Company which competes in the aeronautical and aerospace industries. Boeing is producing a new product, the Dreamliner, which can benefit from contribution margin analysis in order to determine how many units must be produced to achieve the company’s profit targets. However, because contribution margin analysis incorporates variable costs, this analysis is constantly shifting and must be performed at regular intervals throughout the fiscal year.
OVERVIEW
Contribution Margin
Many analysts and corporate managers utilize the contribution margin approach to income...

.....iable costs. For instance, Boeing’s Dreamliner is still in development and its manufacturing process is a globalized supply chain which is subject to constantly fluctuating cost variables such as fuel costs, labor expenses, and customs duties (Boeing, 2009). These charges are difficult to predict and the result is that the firm’s contribution margin is constantly shifting.
REFERENCES
Boeing Company, The. (2009). Datamonitor Company Profile, 06/19.
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Based Program Budgeting: A System-Dynamics Perspective. Public Administration Review 62.1, p.51+.
Sprohge, Hans-Dieter, and John Talbott. 1990. How Contribution
Margin Analysis Helped Andre's Salon. Journal of Accountancy 170.2, p.110+.