Question

Which variables are most important to control to achieve either break-even or target profit, why some of those variables are easier than others to control and are there any variables that are controlled better if they were outsourced?

Answer 1

In the case of break-even point or target profit, inorder to bring down the break even point and to acheive the target profit, relevant variable costs are to be controlled.

Irrelevant variable costs are however be incurred as they are planned.

Relevant variable costs can be controlled as they are relevant for the particular decision.

Yes, there are variables that are controlled better if they were outsourced, they are relevant variable costs, for example, the direct material , direct labor and variable overhead of production, these can be avoided if the product is outsourced.