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“VC approach treats fixed costs as period costs, therefore break-even point is not additionally affected by differences between production and sales levels (only one break-even point exists)”.How could break even point be affected by the sale and production as per statement above?
Where on earth did you find that statement? 🙂
It is correct, but whoever wrote it has made it unnecessarily complicated.They are saying that the sales and production do not affect the breakeven point – they don’t.
I do suggest that you watch my free lectures on CVP – they cover everything you need for the exam.
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