This chapter explains the following points.

4.2.1 Identify and classify costs:
• Classifying costs – fixed, variable, average, total; use examples to illustrate these
• Use cost data to help make simple cost-based decisions, e.g. to stop production or
continue
4.2.2 Economies and diseconomies of scale:
• The concepts of economies and diseconomies of scale; examples of both
4.2.3 Explain, interpret and use a simple break-even chart:
• The concept of break even
• Construct, complete or amend a simple break-even chart
• Interpret a given chart and use it to analyze a situation
• Use a chart to help make simple decisions, e.g. impact of higher price
• Understand the limitations of break-even charts