Costing and profitability
Know what you earn — by product, customer, project and service
We establish true cost, contribution and profitability by product, customer, project, service or channel — frequently a different picture from the one revenue alone suggests.
Pricing decisions grounded in true profitability rather than competitor rates.
Understand the real margin.
Revenue, cost drivers and contribution
The problem
Where margin quietly leaks
- Overheads are allocated with no real logic behind them.
- Prices are set against competitor rates rather than cost and value.
- High-revenue customers or products turn out to have weak contribution.
- Wastage, rework and idle capacity stay hidden in the numbers.
Costing services
- Product, service, project and job costing.
- Standard and activity-based costing.
- Overhead and shared-cost allocation.
- Landed cost and inventory cost analysis.
- Variance, yield, wastage and capacity analysis.
Profitability and pricing
- Contribution margin.
- Break-even analysis.
- Customer, channel and project profitability.
- Pricing scenarios.
- Cost-reduction opportunity analysis.
The management routine
- Agree the cost drivers.
- Validate the source data.
- Build the cost model.
- Review insights with operations and sales.
- Track margin-improvement actions.
5th Quadrant provides management costing and profitability analysis for internal decision-making. Statutory cost audit, where applicable under Section 148, is performed by an eligible practising Cost Accountant.
Practical outputs
What you receive
- Costing model.
- Cost-driver and allocation logic.
- Product/customer/project profitability report.
- Contribution and break-even analysis.
- Pricing scenario model.
- Cost-improvement action tracker.
Ask us for our Product and Project Costing Checklist when you get in touch.
Evidence
Evidence, not assertion
Anonymised sample deliverables and case studies for this service are in preparation. Ask us for examples relevant to your industry, and we will take you through our review controls, reporting frequency and the roles accountable for each.
Frequently asked questions
How is product cost calculated?
By tracing direct material and labour to the product and allocating overheads on a logical driver — the specific method (standard costing vs. activity-based costing) depends on your business.
What costs should be included in project profitability?
Direct project costs plus a fair share of shared overheads, so the margin reflects the true economics of the project rather than just its revenue.
What is contribution margin?
Revenue minus variable costs — it shows what each additional unit, customer or project actually adds before fixed overheads, which is often more useful for pricing decisions than a fully-loaded margin.
How does costing support pricing decisions?
Once you know true cost and contribution by product or customer, pricing scenarios can be tested against margin impact rather than set purely on competitor rates.
Can 5th Quadrant analyse wastage and capacity costs?
Yes, variance, yield, wastage and idle-capacity analysis are part of the standard costing scope.
Does 5th Quadrant conduct statutory cost audit?
No. This is management costing and profitability analysis. Statutory cost audit under Section 148 of the Companies Act must be conducted by an eligible practising Cost Accountant.
The connected picture
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