Breakeven Analysis Flashcards
1
Q
2 examples of variable costs
A
Ingredients
Packaging
2
Q
2 examples of fixed costs
A
Rent
Advertising costs
Insurance
3
Q
2 advantages of contribution
A
Used to set the price of the product in relation to direct production costs
Able to see whether the product covers their own variable costs
4
Q
2 disadvantages of contribution
A
Does not take into account fixed costs
Assume that prices remain constant
