BUSINESS COMMUNICATION Lecture Notes - Qantas, Fixed Cost, Variable Cost

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Introduction: cvp analysis is concerned with the change in profits in response to changes in sales volumes, costs and prices, helps answer the following questions:- Cost behaviour: examining cost behaviour enables us to consider. The way in which costs change, and. We will only cover fixed and variable costs in this course. Traditionally, costs have been classified as being fixed, variable or mixed. An understanding of these is important for basic cost volume profit analysis. We use this analysis to investigate the change in profits in response to changes in sales volumes, costs and prices. Total fixed costs remain the same, but fixed costs per unit will decrease as the number of units produced increases. Variable costs change in total as the level of activity changes e. g. cost of bricks to build a house, aviation fuel for qantas, direct materials, direct labour,

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