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Differentiate between variable and fixed costs. Describe the two major behavior patterns. What if a cost has characteristics of both patterns? What is meant by

  1. Differentiate between variable and fixed costs. Describe the two major behavior patterns. What if a cost has characteristics of both patterns?
  2. What is meant by the term break-even point? What is a potential benefit of calculating break-even?
  3. Why is the concept of relevant range crucial for understanding fixed-cost behavior?
  4. What is the formula for calculating the break-even point in sales revenue?
  5. What formula is used to solve for the break-even point in units?
  6. How can the break-even formula be altered to calculate the number of units that must be sold to achieve a desired level of income (target income)? Show the formula and explain.
  7. What effect would you expect the mechanization and automation of production processes to have on the break-even point?
  8. Why might a business wish to lower its break-even point? How would it go about lowering the break-even point?
  9. Describe three ideas that can lower the break-even point and include a simple example with numbers.

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