The purchasing manager for Stockholm Inc. has been able to purchase the material for its signature handbags for $2 less per bag. Keeping everything else the same, what effect would this reduction in material cost have on the break-even point for Stockholm Inc.? Now assume that the sales manager decides to reduce the selling price of each handbag by $2. What would the net effect of both of these changes be on the break-even point in units for Stockholm Inc.?

Under job costing, why does management need to know the cost of a job? give at least 3 reasons.