Using Step Costs to Manage Capacity
Is Additional Capacity Worth the Cost?
Profitability is often a function of capacity. More sales may be extremely profitable or may trigger a step cost that plunges profitability.
In this video, I’ll:
- Explain the importance of step costs to determining profitability
- Reveal one of the biggest budgeting mistakes I've seen
- Describe the importance of bottlenecks and their impact on production