How products are priced impacts budgeting. Consider the concept of breakeven analysis and target income.

• To apply breakeven analysis, why would the expenses reported in external financial reports need to be reorganized into categories based on cost behavior?
• How do these analytical tools relate to product pricing and cost management (i.e., why would this analysis be useful to management)?
• Why would a company seek to position its products as low-priced or high-priced items in the marketplace? How might this affect sales dollars, sales volume, and profits?