The roles of pricing decision and several combination of prices that affect a firm’s BEP (Break Even Point) Introduction: Costs of production and sales do not vary in a particular period of time. For example, rent, salary, and interest should be paid on a monthly basis whether the company produces products or not and this cost is known as the fixed cost . Cost that differs directly on the basis of the level of production. For example, material cost, electricity cost, and wages paid only if it can be used; otherwise, the company need not spend an amount for these expenses and this cost is known as the variable cost .

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Chapter 13.5, Problem 13.5LO

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To explain: The roles of pricing decision and several combination of prices that affect a firm’s BEP (Break Even Point)

Introduction:

Costs of production and sales do not vary in a particular period of time. For example, rent, salary, and interest should be paid on a monthly basis whether the company produces products or not and this cost is known as the fixed cost.

Cost that differs directly on the basis of the level of production. For example, material cost, electricity cost, and wages paid only if it can be used; otherwise, the company need not spend an amount for these expenses and this cost is known as the variable cost.

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