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Participation Exercise #6 - Assignment Example

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These costs range from fixed costs and variable costs. The fixed costs remain the same throughout or for a longer period in the business while the…
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Participation Exercise #6
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Download file to see previous pages The higher the number of units produced the lower the variable costs providing for more profits to the business (Von). The lower the number of units produced the higher the variable costs incurred. It is relevant to note that the higher the variable costs the lower the breakeven point, the lower the variable costs the higher the breakeven point and hence the level of profits the business registers.
Overheads normally refer to the fixed costs that the business incurs in running its regular operations in production. The more the volumes produced the lower the fixed costs in each unit product. These affect the breakeven point based on the costs aspect.
The selling price depends on the costs incurred and the number of units produced. The point the selling price is set at needs to consider the breakeven point to ensure the profitability of the ...Download file to see next pagesRead More
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