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    Operating margin

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    Operating Margin

    A pediatric unit has the following revenues for the last two months of the quarter:

    April $6,325,000
    May $4,875,000

    It also has the following expenses:

    April $1,250,000
    May $785,000

    Define and calculate the operating margin for each month.

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    Solution Preview

    The operating margin is a reflection of how profitable the facility is or how much of the earnings are available for fixed costs. The formula for this calculation is Income/Revenue X 100 (represented as a ...

    Solution Summary

    This solutions briefly explains what operating margin is and how to calculate it, with examples.