Business Studies

• Break-even analysis is a powerful tool that helps a business determine the minimum amount of sales it needs to achieve to cover its costs.
• It allows a business to determine at what point it will start making a profit and is critical in determining pricing and sales strategies.
• […]
  • Break-even analysis is a powerful tool that helps a business determine the minimum amount of sales it needs to achieve to cover its costs.
  • It allows a business to determine at what point it will start making a profit and is critical in determining pricing and sales strategies.
  • […]

• Absorption costing is a traditional method of costing that allocates all manufacturing costs to the cost of a product, including direct costs such as material, labour, and overhead costs. In this method, fixed overheads are absorbed into the cost of production.

Numerical example:

Let’s assume […]

1. Direct Cost: Direct costs are costs that can be traced back to a specific product or service. Examples include raw materials and labour costs.
2. Indirect Cost: Indirect costs are costs that cannot be easily traced back to a specific product or service. Examples include rent, utilities, and administrative expenses.

• Production costing refers to the process of calculating the cost of manufacturing a product or providing a service.
• It involves identifying all the expenses incurred during the production process, including direct and indirect costs, in order to determine the total cost of producing a product.

• Capacity utilization refers to the extent to which the production capacity of a business is being used over a period of time.
• It is a crucial aspect of production management as it helps businesses to optimize their resources and maximize their profits.
• Capacity utilization is the percentage of […]
  • Capacity utilization refers to the extent to which the production capacity of a business is being used over a period of time.
  • It is a crucial aspect of production management as it helps businesses to optimize their resources and maximize their profits.
  • Capacity utilization is the percentage of […]