Terminology

Economies of Scale

Of the basic business principles, economies of scale has the greatest impact on profitability over any other business principle.   As an enterprise’s investment is spread over higher volume the cost per unit of production […]

Accounting Concepts and Principles

Breakeven Analysis – Fundamentals

Breakeven analysis is a managerial (cost) accounting tool used to examine the relationship of price to cost of a product.   It also considers various sales volumes and the effect on profit given the different relationships of […]

Accounting Systems and Technology

Gathering Data from Sales

In business the best source of new business is the existing customer.  Discovering the customer’s habits and characteristics allows the sales department to expand into new geographical territories with similar customer characteristics and/or modify the […]

Construction Industry

Margins in Construction

I’ve been asked to identify the average margins in the construction industry.  Honestly, there is no such thing.   I tried and after several hours of research I couldn’t even get one of the types of […]

Marginal Value

Marginal Revenue in Business

The scholarly definition and reality are two different perspectives.  The student is taught that marginal revenue equals the additional dollars generated for an additional single unit of sales.  It is literally taken right down to […]

Terminology

Mixed Costs

Mixed costs are a more advanced business concept.  Mixed costs refer to a combination of both a fixed and variable component.  A common error made by most small business entrepreneurs is the misapplication of the […]