USA How do I Assess Profit at Each Step in Operations?


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Need to understand the nuances of assigning profits. Presently we have several different operations. For example, one place molds plastic goods. One place paints the goods. One place sells the goods. Then the FGs are sold. If you wanted to create a P&L by each step in the operations, what would be the best way to do that?
 
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Sounds like you're looking for guidance on marginal analysis. It's not something that would be part of a conventional p&l. It's more of an operations management function. That is, you want to determine the marginal cost of each component and then determine marginal revenue. Doing that would require distinguishing between variable and fixed costs. Sales would be more of a fixed cost unless you factor for commissions and bonuses. Even then it's more of an overhead expense than a candidate for marginal analysis. That's especially the case if you're including marketing expense in that category.
 
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kirby

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Can’t record a true accounting profit until goods are sold. So I am lost on the concept of recording a profit as the goods are constructed.
 

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