How has my profit margin risen?
The margin with 1 bag was \$25 (revenue) / \$15 (labor + materials), or ~166%. The margin with 2 bags, assuming no additional labor costs, is \$50/$25, or 200%.

When this business plans out expenditures on labor and materials for the third time around, it has \$50 cash, enough to pay $5 for labor and up to of 4.5 bags of candy.