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COSTS, image, Trinidad Porretti, Lucia Caviglione, Valentina Re and Abril…

- - - - amount by which sales level exceeds the break-even level of output
      - indication of how much sales could fall without the firm falling into loss
  - - - Not all costs can be classified into fixed and variable, and it will be much more complicated to add semi-variable costs.
      - It is assumed that all units produced are sold and inventory levels are not taken in consideration.
      - It is unrealistic to present costs and revenues as straight lines because not all variable costs change directly with the output.
      - It is unlikely that fixed costs will remain unchanged when the output levels are up to maximum capacity.