Costs, Contribution and Break-even Analysis

Question 1

definition of marginal cost

Answer 1

it is the cost of producing one extra unit. It is the sum of the variable costs of producing that extra unit.

Question 2

what are the 4 limitations of break even analysis

Answer 2

assumptions about costs and selling prices may be incorrect.
most businesses do not sell one product
fixed costs eventually increase in order to go beyond certain levels of output
assumptions about how likely a business is to achieve the target level of sales may be incorrect