Читать книгу Cost Accounting For Dummies - Kenneth W. Boyd - Страница 61

A little comprehension goes a long way. I work with many small-business clients who use cost-volume-profit analysis, but they don’t know the terminology or how it really works. To illustrate, one client, Barb, owned an advertising premium company, producing and selling promotional items. She made items such as T-shirts, water bottles, bumper stickers, and anything with a company logo that would help promote a company’s product or service.

Barb knew the company’s total fixed costs. In fact, she could recite the cost of her lease, insurance, and loan interest off the top of her head. She also knew the variable cost she would incur for every item she produced. Finally, she had a sales amount in mind every month that she hoped to achieve. Barb knew how much profit she would generate if she hit that sales number.

Barb’s problem was that all these facts and numbers were swimming around in her head and not organized on paper. She needed a simple tool to analyze costs, sales (volume), and profit in one place. That’s the value of cost-volume-profit analysis. An owner or manager can have all three calculations in one formula and understand how they affect one another. So when you understand cost-volume-profit, you’ve added a powerful analytical tool to your arsenal.