| Eric Laing provides a clear analysis of your profit with which to make better decisions by: |
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Analysing and explaining your profit, after charging variable, “step” (see definition below) and fixed costs, by |
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Product or service |
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Customer |
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Market |
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Route to market |
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The “step” and fixed costs will be attributed only where there is an identifiable relationship to the product or service, customer or market. Costs will not be arbitrarily apportioned. |
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The information is often shown graphically, so that conclusions may be more easily drawn from it. |
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Key messages are extracted from the information |
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“Step” costs are costs, which are fixed for a range of volumes, but which change when the volume moves out with the range. For example, supervision salaries are often a “step” cost. They may be fixed until the volume rises to the point where an extra shift has to be added. At that point, additional supervision will also have to be laid on. |
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