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
Top US BCG / MBB Coach - 5,000 sessions |Tech, Platinion, Big 4 | 9/9 personal interviews passed | 95% candidate success

Hi there,

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

If so, I would agree!

Similar Questions
Consulting
Just did the Mckinsey Solve Game (January 2025) - got some questions/insights
on Apr 24, 2025
Global
5
3.2k
Top answer by
Hagen
Coach
#1 recommended coach | >95% success rate | 8+ years consulting, 8+ years coaching and 7+ years interviewing experience
35
5 Answers
3.2k Views
+2
Consulting
Employment Gap on Resume and How to talk about it during Interview
on Apr 14, 2025
Global
9
7.8k
Top answer by
Ariadna
Coach
BCG | Project Leader and Experienced Interviewer | MBA at London Business School
110
9 Answers
7.8k Views
+6
Consulting
How should I explain a change in course at university? Will it be asked of me?
on Apr 14, 2025
Global
10
3.4k
Top answer by
Alessa
Coach
xMcKinsey & Company | xBCG | +200 individual & group coachings | feel free to schedule a 15 min intro call for free
81
10 Answers
3.4k 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.