COST ACCOUNTING
BREAK EVEN POINT
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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They will be able to increase output
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It will help them fix the price of the product(s)
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The information would have to be published to shareholders
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Costs will tell the managers, without any other information, what the profits of thebusiness are
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Detailed explanation-1: -Which of the following is a reason for managers knowing the costs of the business? They will be able to increase output. It will help them fix the price of the product(s).
Detailed explanation-2: -It is important for management to understand product cost information to properly understand the flow of information into an entity. Understanding product cost information allows a firm to properly price a product to ensure adequate margins.
Detailed explanation-3: -Understanding your costs is vital for informed business decisions. It helps you determine the profitability of your operations and how to set prices. But proper costing is complex, and many businesses aren’t doing a good job.
Detailed explanation-4: -Answer and Explanation: The correct option is c. The fixed cost per unit decreases when volume increases.