COST ACCOUNTING
BREAK EVEN POINT
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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Which of the following is a reason for managers to know the costs of a business?
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they will be able to increase output
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the information will have to be published to the shareholders
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it will help them to fix the price of the products
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costs will tell the mangers without any other information, how much profits the business makes
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Explanation:
Detailed explanation-1: -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-2: -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-3: -Answer and Explanation: The correct answer is option d. property taxes. A fixed cost does not change with the production volume within a relevant range for a given period of time.
There is 1 question to complete.