Costing Techniques – Pricing for Profit

Every decision that a organisation makes will have some impact on costing issues and eventually the bottom line.

To make smart decisions it is vital to understand the relationship between fixed and variable costs and then be able to apply these concepts correctly to either Absorption or Marginal Costing techniques.

Any decision to introduce or discontinue the operations of a product or service, needs to be made with careful consideration to ‘contribution’ factors.


  1. Create a list of what you think are fixed costs in your business
  2. Do the same for variable costs.

Does the total cost of each item vary as output increases or decrease – mark each item Y or N

Email your answers and I will comment.


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2 Responses to “Costing Techniques – Pricing for Profit”

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