فصل: Chapter 1: Fundamentals
Contribution margin and break-even
One tool answers three questions: when do we start making a profit? How far can sales fall? And what is the lowest price we…
Budgets and performance analysis
A budget is a plan expressed in numbers. Its value does not show on the day it is approved, but every time it is…
Short-term decisions
Four decisions recur in every business, and all of them are solved by one rule: compare what changes with the decision, and ignore what…
Responsibility centres and performance evaluation
A manager is not held to account for what they cannot control. That simple principle is the foundation of every fair performance evaluation system…
What is cost accounting and what does it do?
Between an accounting that tells the outside world "how much did we earn" and one that tells management "what should we do", cost accounting…
Classifying costs
A single cost may be classified in several ways at once. What matters is knowing which classification serves the question in front of you…
Calculating the cost of a product
The question that looks simple and is not: what did a single unit cost us? The answer depends on how you allocated the costs…
Costing systems: job and process
How costs are accumulated follows the nature of production: distinct products, each one different from the next, or a continuous uniform flow in which…
Standard costs and variance analysis
A standard is "what the cost ought to be". A variance is the difference between it and reality — a question looking for a…
What is accounting and why do we need it?
Before any entry, any ledger and any statement, there is one question: what is this whole thing for?