Advantages:
Shows how many products they need to sell to ensure a profit.
Shows the amount of revenue the business will make at each level of output
Shows whether a product is worth selling or if its too risky
Disadvantages:
Unrealistic assumptions – products are not sold at the same price at different levels of output; fixed costs do vary when output changes
Sales are unlikely to be the same as output – there may be some build up of stocks or wasted output too
It can only be applied to a single product or a mix of products - limiting to a business that sells multiple products
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