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FIXED COST-: It represents the cost which is incurred for a period, and which, within
certain output and turnover limit tends to be unaffected by fluctuations in the levels of
activity. Examples are rent, rates, insurance and executive salaries.
BREAK-EVEN POINT-: It is a point at which a company makes neither profit nor loss.
The marginal cost technique is based on the idea that difference of sales and variable cost
of sales provides for a fund, which is referred as contribution. Contribution provides
fixed cost and profit.