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 […]

Terminology

Leverage in Business

In the simple lever and fulcrum machine the force is magnified onto a load.  The machine creates a mechanical advantage, a form of force amplification.  In business the principle is exactly the same.  Except here […]

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 […]

Variable Costs
Terminology

Variable Costs

Variable costs are those business related expenditures that vary in proportion to production.  The most common examples of variable costs include raw materials, labor, packaging and distribution expenses related to producing and delivering the product […]

Hospitality

Absolute Dollars

In the hospitality industry, there is one financial tenet that takes precedence over any other business perspective.  In this industry, it is about putting the maximum number of dollars (ABSOLUTE DOLLARS) in the register after […]