Economic Margin

Economic Margin measures the return a company earns above or below its cost of
capital and provides a more complete view of a companys underlying economic
vitality. Table 3.. lists the different materials used and their corresponding cost,
and the total product revenue.

Table 3.. Cost of Raw Material

Raw Material
Coco Toddy

Quantity
(L/yr)
145,954,542.2

Unit Price
(Php/L)
14

Cost/ Year
(Php/yr)
656,795,440.1

Quantity
(kg/yr)
24,336,000.00

Unit Price
(Php/kg)
200.00

Cost/Year
(Php/yr)
4,867,200,000.00

Table 3. Income
Product
Coco Sap Sugar

Economic Margin = (Total Cost of raw Material / Total Income from the Product)x100
Economic Margin = (656,795,440.10/4,867,200,000.00) x 100
Economic Margin = 13.49%
Profitability = (Income of the Product Cost of Raw Material/ Cost of Raw Material)
x100
Profitability= (4,867,200,000.00-656,795,440.10/656,795,440.10) x 100
Profitability = 641.0526%
The computed economic margin is 13.49%, which is within the allowable range.
Optimization of different processes will be done. Hence, the production of coco sap
sugar using spray dryer is more way profitable and would yield to a higher amount
of product at shorter time period.
Table 3.. Economic Margin Based on Different Selling Prices
Selling Price (10%)
Raw Material
Low
Medium

Economic Margin
12.14
13.49

High

14.84

Low
Medium
High

14.99
13.49
12.26

Product

Table 3..Profitability Based on Different Selling Price

Selling Price (10%)
Raw Material
Low
Medium
High
Product
Low
Medium
High

Profitability
723.39
641.05
573.68
566.95
641.05
715.16