BUSS1030 Lecture 10: BUSS 1030 lecture 10
27 Jul 2018
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Management reports are optional and structure and format can be whatever they like. Thing include, what to produce, how much, how much to charge, analyse if costs can be reduced. Most info on these reports are based on estimates and projections. The behaviour of costs: (these costs are often estimated figures because you cant get accurate values for future cost values) They often must increase to allow higher levels of output. In some cases the line is not straight, as higher volumes of activity may introduce economies of scale, thus changing the variable costs line as production increases. The cost for heating and lighting would remain largely fixed irrespective of production activity, but for powering of machinery, it would increase with production level. Increases in activity do not have any bearing on total fixed costs. Variable costs will increase on a per unit basis as activity increases. Break-even point occurs where total revenues equal total costs.
