With such "explanations" no wonder many people are uneasy with percentages.
The author, an accountant, states many other stupid things concerning accounting, for instance that computing costs-per-unit is very delicate and it is difficult to get to "the exact ones". This stems from the Thomistic idea that there exist exact unit costs, and that it is the job of the accountant to compute them. This is a profoundly mistaken view. In fact unit costs, though useful to set prices, are essentially artificial computations.
It would be a minor sin if it didn't lead to the common view that airfare and train fare tickets ought to be sold at prices corresponding to their "exact cost" plus a profit.
Another consequence of a wrong understanding of unit costs is, for example, to close a restaurant on days when statistically there aren't enough clients to be profitable. Usually this leads to the eventual bankruptcy of the restaurant. |