(a) Briefly describe the parts of the above breakeven chart marked (i) to (vi). (6 marks)

(b) State and explain the assumptions of breakeven analysis. (8 marks)

(c) Prepare a report addressed to the Operations Manager explaining why it is important to understand the behaviour of cost when using budgetary control.

(Your report should include examples of different types of cost and an explanation of why it is useful to use fixed and flexible budgets.)

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3 (iv) BREAKEVEN CHART (vi) 3 (V) units (ii) (iii)