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Essay's paper info
| Topic: |
Business
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| Number of pages / Number of words: |
5 / 1202 |
Essay's paper body
On a break even chart it assumes that all of the output is sold.
2. The price you first set may be too low and break even may not be achievable so you may have to change your prices.
3. It assumes that if you increase production you will be paying the same variable costs, but this is not so as the output the higher the variable costs...
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If you have reduced pricing for bulk buyers, your costs won't change and your sales revenue will be lower.
5. It assumes that all fixed costs are the same price throughout, however there may be a period where it will cost more.
Why is break even crucial to a business?
Break even is very useful to a business as it can help management considerably to make decisions, these decisions may include; if the business will need to increase production capacity, they can see how far off from break even they are or they may be at break even and want to make a profit...
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