Profit Planning and Control in the Machining Industry Based on the Contribution Margin Concept

• DOI: 10.4028/www.scientific.net/amr.889-890.1532
• Publication Date: 2014-02-06T16:57:29Z
• Authors: Elesandro Antonio...; Wagner C. Lucato; Nivaldo Lemos Cop...; Edson Melo de Souza; Alexandre Augusto...
• Keywords: 0502 economics and business; 05 social sciences; 8. Economic growth

The relationship between suppliers and buyers has had significant changes in recent years. Among those suppliers are small and medium size enterprises (SMEs) providing machining services as demanded by their clients. Usually this type of company faces difficulties to adequately manage the selling price of services to be rendered. Larger companies on the other hand have the ability to quickly and more accurately manage their costs and related prices due to the utilization of expensive software which are often not viable for SMEs. This paper proposes a procedure based on the contribution margin concept which enables the SMEs dedicated to supplying machining services to perform an economic analysis of the machining process as a way to improve the efficiency of its cost management and pricing of their services.