Schedule mock interviews on the Meeting Board, join the latest community discussions in our Consulting Q&A and find like-minded Interview Partners to connect and practice with!
Back to overview
Anonymous A
on Nov 11, 2021
Global
Question about

Relationship profit margin - revenues and costs

Referring to:

Coffee machines revenues have increased by 1/9 in the last year and their costs have increased proportionally. This means that machines profit margin has been steady and price reduction has been offset by lower costs.”

If Coffee machine revenues increase which as prices fall must be due to an increase in units. In the case that units would increase but without a fall in prices, we would expect that profit margins increase as fixed costs are now split among more units. (assuming equal VC). Now that prices fall it seems feasible to me that the profit margin is steady and the same cost levels, as I would normally expect profit margins to increase when units increase.

1
800+
10
Be the first to answer!
Nobody has responded to this question yet.
Top answer
Ian
Coach
on Nov 11, 2021
#1 BCG coach | MBB | Tier 2 | Digital, Tech, Platinion | 100% personal success rate (8/8) | 95% candidate success rate

Hi there,

I think you're saying this situation can only be explained by higher volumes?

If so, I would agree!

Similar Questions
Consulting
How should I explain a change in course at university? Will it be asked of me?
on Apr 02, 2025
Global
9
3.0k
Top answer by
Alessa
Coach
xMcKinsey & Company | xBCG | +200 individual & group coachings | feel free to schedule a 15 min intro call for free
81
9 Answers
3.0k Views
+6
Consulting
How do I show CDD Experiences on a Resume?
on Apr 02, 2025
Global
7
2.1k
Top answer by
Ex-BCG Principal | 8+ years consulting experience in SEA | BCG top interviewer & top performer
52
7 Answers
2.1k Views
+4
Consulting
Has anyone tried any of the AI Interview Tools for MBB before?
on Mar 25, 2025
Global
10
11.5k
Top answer by
Iman
Coach
Systemiq | Ex-BCG | 10 years experience with 8+ specialising in sustainability | Free Intro | Ex-PrepLounge candidate
344
10 Answers
11.5k Views
+7
How likely are you to recommend us to a friend or fellow student?
0 = Not likely
10 = Very likely
Thanks for your feedback! Your opinion helps us make PrepLounge even better.