Cost, Profit And Break-Even
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Three very simple factors determine profit - cost, price and volume. What isn't so simple is their relationship. Cost affects price, price affects volume and volume affects cost. Though there is no magic formula for striking the balance, there is a technique which improves the chance of doing so. John Bird initiates John Cleese into the mysteries of fixed and variable costs, break-even point, contribution, depreciation, and the difference between marginal and total or absorption costing.
Key Learning Points:
- The difference between marginal and total absorption costing
- The difference between fixed and variable costs
- The effects of increases and decreases in production volume on unit costs
- Explain how costs are calculated and their effect on the business
- Confirm the importance of controlling expenditure and revenue
- Understand simple terminology used and how to control the relationship between cost, price and volume
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