With the way that the world's economy works, costs are very important. Costs of certain things also tend to fluctuate based on the market, and the law of supply and demand.
The importance of cost is seen in various aspects of the economy. This is what will be used to determine the revenue and profit margins in an economic current.
Operating leverage decreases as output increases because fixed costs are decreasing in relative importance and variable costs are increasing in relative importance as output rises. Thus, the degree of operating leverage is declining.
The importance of economics is to keep track of money that comes in, and correspondingly what goes out on living costs. This applies from one individual, to a nation's government. Did this answer your question?Tweet This Question to History, Pol
Function-based cost management is the budgeting philosophy that the budget controller (in this case the manager) budgets costs based on the function of a department, person, area, etc. Generally, the manager assigns costs according to the importance of the function to that manager.
Price elasticity has a lot to do with how firms and governments can predict costs and profits. The greater the elasticity, the more uncertain their financial projections will be.
The law of diminishing returns helps managers maximize their profits. At the point where their costs begin to rise, they can switch to another product to make more money.
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The importance of knowing which costs are fixed and which costs are very important in making a business profitable. In order to budget effectively, one needs to know costs that will always be the same (fixed) and the ones that sometimes change (variable).
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The importance of food cost control is to maintain profit margins for the business. In a restaurant food costs and labor are the highest expenses to the business.
Start up costs need to be included in your "Business Plan" that all businesses have before starting any business.
Operating leverage decreases as output increases because fixed costs are decreasing in relative importance and variable costs are increasing in relative importance as output rises. Thus, the degree of operating leverage is declining.
The importance of revenue to a business is, it shows how much money goes into the business & also if you subtract if from costs then it shows how much profit has been made. Hope this helps!!
Prime Costs: Prime costs are those costs which are prime importance for making any product and include: Prime Cost = Direct Material + Direct Labor
cash is important to a business so they can pay of any of their debts or other costs such as loans
accounting matching principals ( costs and revenue ) is very important to show the correct year result.
The importance of economics is to keep track of money that comes in, and correspondingly what goes out on living costs. This applies from one individual, to a nation's government. Did this answer your question?Tweet This Question to History, Pol
How else would you know what costs really were and where they were incurred, and hence how to charge a price that produced a profit?