Analysing costs, profits and break even point.

Costs, Profits and Break-even Analysis Alas, this stiffs coming to terms with numbers, something that seems to pall a large proportion of Business Studies students. Before comer the salute of actually drawing a break-even diagram we pauperism to designate what actually goes into one. First, we need to look at cost. They feces be referred to in terms of output, duration or harvest. When we say of be in terms of output and time we mean inflexible and VARIABLE cost. Remember fixed cost do not vary with output, whilst variable do. The TOTAL costs of a faithful are its fixed and variable costs added to inflexible 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 neat affect. Remember that in the short run the scale of the appendage cannot be changed and some(prenominal) expansion in output has to come from what apparent capableness may be available. In the long run th e blameless scale of the operation can be altered. quite a literally the company can open a newly grind to meet the increase in demand for its harvest-tides. When spirit at the actual product we need to remember that the costs we must(prenominal) now calculate are the DIRECT and INDIRECT costs. roughly people prefer to call indirect costs overheads.

appoint 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 specific product or service . This might be the postage or earphone co! sts, which cannot normally be allocated to just one product or service. When we add the direct and indirect costs to regulateher we get what... If you want to get a full essay, order it on our website: OrderCustomPaper.com

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