Key Management Ratios, 4th Edition

15

Cost, volume and price relationships

Introduction

• Costing illustration
• Contribution
• Break-even (B/E)
• Contribution to sales percentage (CPS)
• Summary

Annual income twenty pounds, annual expenditure nineteen pounds, nineteen shillings and six pence result happiness. Annual income twenty pounds, annual expenditure twenty pounds, and six pence, result misery.

CHARLES DICKENS (1812–1870) (MR MICAWBER)

Introduction

The material covered to date has concerned itself with the company as a single overall unit. In this chapter we probe down into the detailed operations. Of course we find at this level that there are a multitude of separate products within the overall company. Each of these is a small business in itself, and each has its own ...