Assumptions of Break-Even Analysis

1. The break-even chart is fundamentally a static analysis; commonly changes can merely be displayed by drawing a new chart or a series of charts

2. Relevant range is given to explain fixed and variable costs in relation to an exact period and designated range of production level

3. All costs go down into either variable or fixed cost classification

4. Unit variable costs stay the similarity and there is a direct relationship between volume and costs

5. Volume is assumed to be the merely important factor affecting cost nature

6. Unit sales price and other market situations are assumed to stayed unchanged

7. Net fixed costs stay constant over the relevant range considered

8. Inventory changes are so unimportant such they have no impact on the analysis

9. The technology level does not change.

Posted Date: 2/7/2013 12:37:17 AM | Location : United States

Ask an Expert

Related Discussions:- Assumptions of break-even analysis, Assignment Help, Ask Question on Assumptions of break-even analysis, Get Answer, Expert's Help, Assumptions of break-even analysis Discussions

Write discussion on Assumptions of break-even analysis
Your posts are moderated

Write your message here..

Related Questions

Determine the economic order quantity, A retailer knows the annual demand f... A retailer knows the annual demand for one of its product is 100,000 units, the ordering costs are £25 per order and the average carrying cost per unit is 35 pence. You are require

Manufacturing Costs, Is there a way to figure out labor cost and factory i... Is there a way to figure out labor cost and factory inventory when no direct information regarding them is available.

Traditional Costing System and Job Order Costing System, Hello, I''m curren... Hello, I''m currently doing a research on a company and planning an Activity Based Costing system since the company is using Traditional Costing system to allocate the overhead to

Determine profit by using absorption costing, Determine Profit by Using Abs... Determine Profit by Using Absorption Costing Assuming the fixed overhead absorption rate was Ksh.3 per litre, then what would be the profit utilizing absorption costing? a)

Accounting for materials, list and explain all the procedures of material c... list and explain all the procedures of material control

Meaning of budget, BUDGET A BUDGET is a quantitative expression of a ... BUDGET A BUDGET is a quantitative expression of a business plan for a particular future period, generally a year. BUDGET is the planned future course of action. BUDGET

Determine how much to stock, Determine how much to stock 1. Employ The... Determine how much to stock 1. Employ The Economic Order Quantity Model This is an easiest model which helps the manager to find out the optimum quantity of stock to order

Motivation - behavioural aspects of standards, Motivation - Behavioural Asp... Motivation - Behavioural Aspects of Standards Variance analysis and standards setting requires to be carried out like it motivates managers and other employees. It should not

How much are your fixed costs, 1.    The following table summarizes the sho... 1.    The following table summarizes the short-run production function for your firm. Your product sells for $5 per unit, labor costs $5 per unit, and the rental price of capital i

the practice of standard costing., Determine why  JIT, TQM and AMTs may no... Determine why  JIT, TQM and AMTs may not always be entirely compatible with  the practice of standard costing.