Final answer:
The analytical approach is used to separate costs into variable and fixed categories in business. Understanding cost breakdowns helps businesses make informed decisions on production and pricing strategies.
Step-by-step explanation:
The subject of this question is Business and the grade is High School.
When it comes to separating costs into variable and fixed categories, the approach being referred to is the analytical approach. This approach allows businesses to break down their costs into different components, such as fixed costs (costs that do not change with the level of production) and variable costs (costs that change as production levels change).
Understanding the breakdown of costs can be beneficial for businesses as it provides insights into how costs affect their operations, pricing strategies, and profitability. By analyzing measures such as average total cost, average variable cost, and marginal cost, businesses can make informed decisions regarding their production and pricing strategies.