Question

The senior partner of an accounting firm is looking for ways to increase the firm's business. What other services besides traditional accounting can the firm offer to its clients? What new challenges might this additional work create?

Please do some quick research on variable costs, fixed costs, and break even analysis. How do businesses use this kind of information, which concept do you think is most useful, and why?

Answer 1

Answer)

Beside accounting services,the traditional accounting firm can offer cost consultation services,internal audit services,With somewhat training tax planning and filling and other services like forensic services etc.

These are more complicated than only accounting services as areas like internal audit,tax planning etc are full of risk and areas like cost consultations etc needs more knowledge on operations performed at clients entity are major challenges which need to be planned carefully and then performed.

Fixed costs are the costs which doesn't change with change in output.Eg:Building rent.

Variable costs are costs that change with change in output.

Eg:Direct material cost.

Break even analysis is an analysis to know the point where the revenue earned will be equal to expenditure incurred.In brief it is a point where there will be no loss or profit.