Profit/ Loss and Profitability Cases

Frank asked on Dec 15, 2017 - 2 answers
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It seems to make sense to segment costs using the same criteria to segemnt markets. Has there ever been a case where this was not true?

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Anonymous A replied on Dec 15, 2017

Use Fixed and Variabel instead.

Vlad
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replied on Dec 21, 2017
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Hi,

If you are talking about asking the interviewer re the segmentation first - that is correct.

The particular cost structure may be segmented differently:

  • Fixed and variable
  • Per unit basis
  • Value chain
  • Any other structure that the interviewer may provide.

Ask about the cost structure proactively and then if the interviewer asks you to make a hypothesis re costs - use the most common FC / VC structure

Best

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