02 — Capability · BC-220.40
Cost & Profitability Analysis
Know what each product, customer, channel and activity truly costs and earns, so decisions about what to grow, fix or stop rest on margin rather than revenue.
- Cost Accounting
- Profitability Management
In scope
- Cost allocation and activity-based costing
- Product and customer profitability
- Unit economics and cost-to-serve
Out of scope
- Setting prices (see BC-470)
- Standard costing inside production (see BC-630)
Realized by · 1
Used in · 3
Build it · 0
- Nothing in the library points here yet.
Decomposes into · 4
- BC-220.40.10Cost AllocationAssign shared and overhead costs to the products, services and units that consume them, on bases that the recipients accept as fair.
- BC-220.40.20Product & Service ProfitabilityMeasure margin by product or service after fully loaded cost, revealing which offerings subsidize the others.
- BC-220.40.30Customer & Channel ProfitabilityMeasure what each customer segment and route to market costs to serve against what it returns, so growth targets chase the right customers.
- BC-220.40.40Cost Optimization AnalysisIdentify where cost can be removed without removing the value it buys, and quantify the saving before anyone commits to it.