What are some effective cost analysis techniques?

What are some effective cost analysis techniques?

There are several effective cost analysis techniques, including break-even analysis, cost-benefit analysis, and activity-based costing. Would you like to know more about any specific technique?

Can you explain break-even analysis?

Sure! Break-even analysis helps determine the point at which total revenues equal total costs, meaning there's no profit or loss. It's useful for understanding the minimum sales needed to avoid losses.

How do I perform a cost-benefit analysis?

To perform a cost-benefit analysis, list all costs and benefits associated with a project, assign monetary values to them, and then compare the total costs to the total benefits to see if the benefits outweigh the costs.

What is activity-based costing?

Activity-based costing (ABC) allocates overhead costs based on activities that drive costs, providing more accurate product costing and helping identify areas for cost reduction.