# Margin % Bridge - Effect of Price, Cost, Volume

Given sales and profitability data for two time periods, how would I go about calculating the impact of price, cost, volume and mix margin % (bps)? I can do the analysis as a gross margin $bridge, but I'm unable to convert that to margin %. I'd like to create something like this: http://www.pwc.com/en_GX/gx/technology/publications/assets/technology-news-gross-margin-analysis.pdf Looking at that analysis, I can't reconcile how$2.5M in price be favorable 120 bps to margin.

Std Margin of \$174.2m (57.2%) Price of \$2.5m (1.2%)

Would suggest that margin after the price change is 58.4%

Working backwards Std Margin of $174.2 at 57.2% would mean: Revenue: \$304.54m (174.2 / .572)
Cost: $130.34m A$2.5m price increase would be 174.2+2.5 = 176.7m of margin on 304.54+2.5 = 307.04m revenue, which is only 57.5% margin or 30 bps difference. How does 120 bps get derived?

• did you ever get a solution for this? if so, could you provide me with some guidance? – Alex Jul 1 '17 at 9:26