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Post by account_disabled on Dec 26, 2023 8:19:50 GMT 2
Template for Your Budget Planning [free Download] ? The Operating Optimum is Important From an Economic Perspective Because It Represents the Minimum of the Average Costs That Arise as Part of a Production Process. You Use the Operating Optimum to Determine the Long-term Lower Price Limit. If You Set a Net Sales Price That is Below the Operating Optimum, You Will No Longer Be Able to Make a Profit or Fully Cover Your Costs. Why is Operating Optimum Important? With the Operating Optimum You Set Your Long-term Price Floor. You Determine the Minimum Average Unit Cost , Which is Identical to Your Prime Cost . If Your Operating Optimum is Zero , You Will Make Neither a Profit Nor a Loss From Selling C Level Contact List a Product . Here You Cover Exactly the Costs That Arise During a Production Process. If the Operating Optimum is Positive, You Can Generate a Profit From the Sale . If You Determine a Negative Operating Optimum , You Will Make a Loss Because the Specified Selling Price is Not Enough to Cover the Costs. It is Therefore Important. That You Use the Operating Optimum to Determine the Maximum Marginal Costs That You Are Allowed to Spend in Order to Achieve a Maximum Profit From the Sale of a Product. What is the Operating Minimum? The Operating Minimum is the Minimum Goal You Should Achieve When Producing a Product. It Shows How High the Proportion of Variable Costs Are That Occur in a Production Process. This Means That You Will Not Be Able to Cover Your Costs and Will Incur a Loss.
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