It is important for a firm to understand the full scope of revenues and costs that are incurred primarily to make decisions regarding how factors of production are utilized. By having a clear understanding of both revenues and costs, firms can analyze their production processes, identify areas for efficiency improvement, allocate resources effectively, and ultimately make informed strategic decisions to optimize profitability and sustainability.
While the other options may relate to financial performance in some way, they are not as directly connected to the reason a firm needs to understand its full revenue and cost structure.