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CVP and BEP - Coggle Diagram

- - - - more proactive risk management
      - better decision making
      - may help find opportunities or risk
- - - - relevant range means the cost and revenue relationship is valid (linear assumption)
- - - - TOTAL FC IS CONSTANT within relevant range
      - PER UNIT CHANGES INVERSELY with unit produced (high production, less fc per unit) - economies of scale
      - fixed step cost - when fixed cost is not on relevant range, significantly increases beyond level/activtity
    - - total cost
      - gradually increasing because of variable cost
      - unit cost - inverse proportion with quantity because of fixed cost
    - - VARIES in TOTAL, direct proportion to changes in level of activity
      - PER UNIT IS CONSTANT, but only within the relevant range
- - - - proportion of sales mix must be predetermined
      - sales mix is constant within relevant range