Operational cost analysis explains how costs behave as volume, mix and capacity change. It supports pricing, plant loading and expansion decisions.
Scope of service
- Fixed and variable cost separation
- Break-even and margin of safety
- Contribution by product and customer
- Capacity utilisation and idle cost
- Location or plant comparisons
Regulatory framework
- CAS 2 (Capacity Determination)
- Marginal costing techniques
Typical professional activities
- Cost behaviour study
- Scenario models
- Decision memoranda
Applicable industries
- Manufacturing
- Automobile & Auto Components
- Engineering
- Pharmaceuticals
- Infrastructure
- Sugar & Agro Industries
- Service Industries
Relevant articles and resources
- Break-even and contribution analysis with a worked example
- CAS-2: capacity determination and the cost of idle capacity
- Knowledge Centre: Management Accounting
- Break-even Analysis Calculator
- Contribution Analysis Calculator
The information on this page describes the nature of the service. It is not advice on any specific matter. See the disclaimer.