Cost detection and anaysis

The desire to increase the level of production is quite common and legitimate. And it is the first thought in the case where the marginality does not produce the expected profit.


Because it is believed that having a greater quantity of goods to be destined for sale increases the company size. But will this also improve profitability, producing the desired effects?

Revenues - Costs = Profit

Think about the fact that for costs we have to understand: the value of goods and / or services (productive factors) used or "consumed" to realize a certain product or to make a certain process work.

To simplify, we wanted to graphically represent the most common cost components.

To respond consciously to the entrepreneurial question it is necessary to know if we have correctly placed the "break-even point" or the threshold beyond which we begin to produce a profit.
It is evident that knowing this answer in advance avoids involving the company, the employees and ourselves in a process that would lead us to sell at a loss and in such circumstances, the analysis of costs, will have to lead us to other solutions.