9609 · 5.4.3
Uses of cost information — FAQ
Frequently asked questions for 9609 Uses of cost information. Direct answers first, then deeper explanation — then practise with marking.
Should price always cover full unit cost?
Long run: yes, or the business cannot survive. Short run: a promotional or special order may cover only variable costs if it contributes to fixed costs and does not displace better sales.
How does this topic link to 5.4.4 break-even?
Break-even is one specific use of contribution-based cost information — finding the output where total contribution equals fixed costs.