Contribution Margin as a Management Tool: Application in an industry of extraction and processing of minerals

Abstract

The study is subject to cost accounting, specifically the analysis of the use of the contribution margin as a management tool. The central aim of the research is to analyze the contribution margin of the products manufactured by a company that develops activities related to the extraction and processing of ore and its contribution to decision-making, using the variable costing method. The methodology used in the research is characterized as a case study, exploratory and descriptive study, qualitative and quantitative data, conducted through document analysis. Therefore, we sought to identify the elements of component costs of products and other information necessary for the study of the contribution margin. The main findings in the study show that all products manufactured by the organization under study have significant contribution margin. It was found that the company does not use researched analysis of the contribution margin as a tool to support decision making. In this sense, after the completion of the proposed study, we concluded that the use of the contribution margin for purposes of policy making can contribute to the organization to maximize the company's results, since such analysis allows the manager to assess the breakdown of direct costs for manufacturing and product profitability, improving training of the sales price.