What is the role of analyzing marginal costs in a business?

Analyzing marginal costs is crucial for understanding the financial viability of producing one more unit of output. Marginal cost refers to the additional cost incurred when producing an extra unit. By assessing this cost, businesses can make informed decisions on whether to increase production based on the additional revenue that would be generated from selling that extra unit. This analysis helps in optimizing production levels, ensuring that the company does not overextend itself to the point where marginal costs exceed marginal revenue, which could lead to financial losses.

In contrast, the other options focus on different financial analysis areas unrelated to the marginal cost concept. For example, determining total profits is more associated with total cost and revenue analysis rather than marginal cost per unit. Measuring the impact of fixed costs concerns long-term pricing and break-even analysis, not the immediate costs of increasing production. Lastly, calculating employee benefits relates directly to compensation and labor costs, which do not directly involve the consideration of marginal costs. Thus, the role of analyzing marginal costs is specifically about understanding the implications of producing additional units, making the chosen answer the correct focus.