Profit Planning and Control in the Machining Industry Based on the Contribution Margin Concept

Abstract

The relationship between suppliers and buyers has had significant changes in recent years. Among those suppliers are small and medium size enterprises (SMEs) providing machining services as demanded by their clients. Usually this type of company faces difficulties to adequately manage the selling price of services to be rendered. Larger companies on the other hand have the ability to quickly and more accurately manage their costs and related prices due to the utilization of expensive software which are often not viable for SMEs. This paper proposes a procedure based on the contribution margin concept which enables the SMEs dedicated to supplying machining services to perform an economic analysis of the machining process as a way to improve the efficiency of its cost management and pricing of their services.

Break-Even Point and its Impact on Profit Planning in Educational Institutions: A Study Conducted in Lima, Peru, 2022

“…An integral part of financial decision making is profit planning (Alam, 2022;Baptista et al, 2014;Graham & Harris, 1999;Harris, 1992;Valle, 2020). This planning is carried out on the basis of several components of production: the choice of costing method, production costs and quantity produced, marketing costs and future revenues generated by the sale of the product (Ávalo Ortega et al, 2016;Getz, 1993).…”