In Developing Forecasts of Expenses the Analyst Must Take into Consideration

question 37

Short Answer

In developing forecasts of expenses the analyst must take into consideration that expenses can be broken down into ________________________ or ______________________ components.

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Definitions:

Fixed Costs

Fixed costs that are unaffected by production or sales volume, like rent, employee salaries, and insurance fees.

Contribution Per Unit

The amount of money each unit sold contributes towards covering fixed costs and generating profit.

Break-Even Analysis

A financial calculation to determine the point at which revenue received equals the costs associated with receiving the revenue, indicating no net loss or gain.

Price Elasticity

A measure of how the quantity demanded of a good or service changes in response to a change in its price.