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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 Summary

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

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 ...

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