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Absorption Costing

How Your “Most Profitable” Product Might Be Killing Your Business

How Your “Most Profitable” Product Might Be Killing Your Business

Why choosing the product with the highest contribution margin can actually lower your total profit. A guide to optimizing product mix using the Theory of Constraints.
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01.11.2025Tags: Absorption Costing, Bottleneck Management, Contribution Margin, Critical Thinking, Eliyahu Goldratt, Financial Planning, Managerial Accounting, Manufacturing Efficiency, Product Mix Optimization, Strategic Thinking, Theory of Constraints, Throughput Accounting, TOC, Variable Costing
Make or Buy? How to Avoid Fatal Decisions

Make or Buy? How to Avoid Fatal Decisions

Should you manufacture or outsource? Don't rely on full production costs. Learn how to analyze relevant costs, opportunity costs, and strategic risks correctly.
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16.06.2025Tags: Absorption Costing, Business Management, Cost traps, Financial analysis, Managerial Accounting, Variable Costing
When Accounting Deceives: How Absorption Costing Distorts Profit

When Accounting Deceives: How Absorption Costing Distorts Profit

Why did profit go up while sales stayed flat? A detailed case study comparing Absorption Costing vs. Variable Costing. Learn how inventory build-up creates "phantom profit".
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04.12.2017Tags: Absorption Costing, Business Management, Costing Traps, Financial analysis, Financial Planning, Managerial Accounting, Variable Costing
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