What question did this study set out to answer?

The aim is to evaluate the contribution margin approach as a superior method for analyzing capacity utilization compared to traditional analysis of variance.

March 18, 2026The Accounting Review

A Contribution Margin Approach to the Analysis of Capacity Utilization.

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Authors

CHCharles T. HorngrenUniversity of Chicago

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Implication

This article demonstrates utilizing a contribution margin approach to improve capacity utilization analysis for organizations, indicating better planning implications.

Key Points

The aim is to evaluate the contribution margin approach as a superior method for analyzing capacity utilization compared to traditional analysis of variance.
Utilized conceptual framework for cost accounting analysis
Distinguished between long-range and short-range factors
Assessed fixed costs in relation to capital budgeting decisions
Evaluated the impact of seasonal and cyclical demand fluctuations
Demonstrated weaknesses in existing capacity analysis practices
Highlighted the importance of careful planning in capacity utilization
Showed how contribution margin approach enhances valuation compared to historical-cost approach
Indicated implications for managers regarding acquired capacity and planning

Cite This Study

Charles T. Horngren (1967) studied this question.

synapsesocial.com/papers/69ba43884e9516ffd37a4dca https://doi.org/10.2308/tar-4499876

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Implication

This article demonstrates utilizing a contribution margin approach to improve capacity utilization analysis for organizations, indicating better planning implications.

A Contribution Margin Approach to the Analysis of Capacity Utilization.

Discussion

Member takes

Implication

Key Points

Cite This Study

A Contribution Margin Approach to the Analysis of Capacity Utilization.

Discussion

Member takes

Implication

Key Points

Cite This Study

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