• ScrivenerX@lemm.ee
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      1 year ago

      Absolutely!

      MC is a great tool for internal accounting that can help a company extrapolate the “true” cost of every item. In this pancake scenario it’s important to remember that the majority of costs are fixed costs, that do not change based on whether they sell pancakes or not.

      There are some accounting methods that spread the fixed costs across all items, but that doesn’t actually change the profitability of the company on the whole, just the expected margin of that particular item.