Sunday, January 26, 2014

Analysing costs, profits and break even point.

Costs, Profits and Break-even Analysis Alas, this concocts coming to terms with numbers, something that seems to dismay a large proportion of Business Studies students. Before grasp the salute of actually drawing a break-even diagram we penury to designate what actually goes into one. First, we need to look at cost. They bay window be referred to in terms of output, epoch or harvest. When we intercommunicate 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 aim 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 piddling direct. Remember that in the short run the scale of the operation cannot be changed and some(prenominal) expansion in output has to come from what write capableness may be available. In the lo ng run the blameless scale of the operation can be altered. preferably literally the company can open a sore grind to meet the increase in demand for its increases. When feel at the actual product we need to remember that the costs we must(prenominal) now calculate are the DIRECT and INDIRECT costs. approximately people prefer to call indirect costs overheads. wrap up 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 telephone set costs, which cannot normally be allocated to just one product or service. When we add the direct and indirect costs to pay offher we get what... If you want to get a full essay, order it on our website: OrderCustomPaper.com

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