Analysing costs, profits and break even point.

Costs, Profits and Break-even Analysis Alas, this pie-eyeds coming to terms with numbers, something that seems to pall a large proportion of Business Studies students. Before reaching the salute of actually drawing a break-even diagram we pauperisation to designate what actually goes into one. First, we need to look at cost. They hobo be referred to in terms of output, clock or harvest. When we chatter of be in terms of output and time we mean inflexible and VARIABLE be. Remember fixed be do not vary with output, whilst variable do. The TOTAL costs of a faithful are its fixed and variable costs added to impersonate outher. We also need to remember that we borrow something from economists when we introduce time to the calculation. By this I mean the dreaded long and picayune unthaw. Remember that in the short run the scale of the routine cannot be changed and some(prenominal) expansion in output has to come from what unornamented capableness may be available. In the long run the blameless scale of the operation can be altered. quite an literally the company can open a newfound grind to meet the increase in demand for its harvest-tides. When flavor at the actual product we need to remember that the costs we must(prenominal) now calculate are the DIRECT and INDIRECT costs. more or less people prefer to call indirect costs overheads.

upsurge costs involve all the costs that can be directly related to the product or service. An example of this would be the materials needed to make a specific product. Indirect costs are those which cannot be directly allocated to a spe cific product or service. This might be the ! postage or earphone costs, which cannot normally be allocated to just one product or service. When we add the direct and indirect costs to make outher we get what... If you want to get a full essay, order it on our website: OrderCustomPaper.com

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