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Cost driver analysis is an important component of strategic analysis. There are two types of organisational cost drivers that determine its long-term cost structure. Required:

Cost driver analysis is an important component of strategic analysis. There are two types of organisational cost drivers that determine its long-term cost structure.

Required: What are the two types of organisational cost drivers? Give examples and explanations of the various factors in both cost driver categories. How does an understanding of them contribute to the identification of profit improvement opportunities?

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