Accounting All-in-One For Dummies

Book VII

Making Savvy Business Decisions

Discover ways to fix bottlenecks, increase efficiency, and lower production costs at www.dummies.com/extras/accountingaio.

In this book…

• Estimate production cost by using job costing and process costing and use either of those values to ballpark a profitable price to charge for a product. Set the right price from the get-go.
• Calculate the product cost based on activities that go into manufacturing and selling the product, so your cost per product and pricing are more accurate. Find out what peanut-butter costing is and why and how to avoid it.
• Analyze a product's break-even point, target profit, and margin of safety. Savvy business owners use these tools to plan production and sales levels.
• Calculate variance into the pricing equation to avoid any nasty surprises. Variance analysis compares budgeting plans with actual results.
• Survey various pricing models to make smart pricing decisions. Decide which pricing method will cover all your costs and generate a reasonable profit.
• Size up the financial condition of your business and recognize the most common early warning signs of financial trouble. Use the results to improve your business.