When making a pricing decision,it is necessary to separate costs into fixed and variable.

Question

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Separating costs into fixed and variable is important in pricing decisions because it helps determine the breakeven point and the profitability of each unit sold. Fixed costs are those that do not change regardless of the level of production, such as rent or salaries. Variable costs, on the other hand, vary according to the level of production, such as raw materials or labor costs. By analyzing these costs, a company can make informed pricing decisions that ensure profitability and competitiveness in the market.

When Making a Pricing Decision,it Is Necessary to Separate Costs