Key Management Ratios: The Clearest Guide to the Critical Numbers That Drive Your Business, Fourth Edition

Chapter 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 ...