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The beginning point in making a profit plan is separating cost into fixed and variable categories. Pure.Variable costs require an additional amount with each increase in volume. The manager has little.Control over this type of cost other than to avoid waste. The accountant can easily determine the.Variable manufacturing cost per unit for any given product or package by using current prices and.Yields. Variable marketing cost per unit is based on the allowable rate (for example, $. 06 per litre for.Advertising). Costs that are not pure variable are classified as fixed but they, too will vary,,,If significant changes in volume occur. There will be varying degrees of sensitivity to volume changes.Among, these costs ranging from a point just short of pure variable to an extremely fixed type of.Expense which has no relationship to volume.
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