The operating margin is the portion of the revenue of a
company after paying all its costs (both variable cost and fixed cost). In this
problem, you are given the revenue (4.2 million) and the cost (3.85 million). To
solve the operating margin, you have to deduct the cost to the revenue. Therefore,
the operating margin of the laboratory is 0.35 million (4.2 million – 3.85
million).
