Agricultural Equipment & Farm Machinery Manufacturing worked example

Service Kit Margin at 27% target service kit margin: a worked example

This worked example runs the service kit margin numbers for a tougher week than the baseline: 27% target service kit margin instead of the typical 38%. Calculate service kit gross margin from kit gross profit, service kit revenue, and a margin target.

The inputs for this scenario

  • Service kit gross profit: 18,500 $ (held at the documented default)
  • Service kit revenue: 42,000 $ (held at the documented default)
  • Target service kit margin: 27 % (the input this scenario stresses; the baseline uses 38)

Working through the calculation

  • The calculation starts from the formula this tool documents: Service kit margin = service kit gross profit ÷ service kit revenue × 100.
  • Service kit margin works out to 44.05 % kit margin at these inputs, and this is the headline figure for the scenario.
  • Kit margin gap to target works out to -17.05 percentage points at these inputs.
  • Service kit gross profit works out to 18,500 $ at these inputs.
  • Service kit revenue works out to 42,000 $ at these inputs.

How this compares with the baseline

  • Against the tool's baseline example, where target service kit margin sits at 38% and the headline result is 44.05 % kit margin, this scenario lands almost exactly on the baseline at 44.05 % kit margin.
  • Use it when pricing a new service kit, reviewing aftermarket SKU profitability, or building the parts department's annual margin plan. A result at this level usually justifies acting on the stressed input before touching anything else, because every other figure in the table is downstream of it.

Results at a glance

  • Service kit margin: 44.05 % kit margin (headline result)
  • Kit margin gap to target: -17.05 percentage points
  • Service kit gross profit: 18,500 $
  • Service kit revenue: 42,000 $

Run it with your numbers

  • To rerun this with your own numbers, open the live Service Kit Margin calculator, set target service kit margin to your actual value, and adjust the remaining inputs to match your operation.

Last reviewed 2026-05-12.