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It allows managers to see how changing sales prices and costs affect their profits. Breakeven analysis can also be modified to help managers determine the level of sales the company has to make to meet specified profit targets.
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1.
Bill has assumed that Duo-Products' relevant range for fixed costs will remain constant even after planned expansion of production capacity. He has also assumed that there is just one breakeven point for the firm (by taking the average of the 3 products). He has also assumed that the sales mix will remain constant...
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