Assumptions of break-even analysis, Cost Accounting

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







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
Related Questions
In most situations this will be essential to grant credit to customers. It may be essential either due to competition or because of the custom of trade. Though, when we grant credi

A bicycle plant runs two assembly lines, A and B. 96.9% of line A's products pass instruction, while only 93.8% of line B's products pass inspection. 70% of the factory's bikes com

Determine the Absorption Rate of Overheads The budgeted production overheads and other budgeted data of compute are given as: Budget Overhead cost for the period = Ks

Polycorp Limited Steel Division is considering a proposal to purchase a new machine to manufacture a new product for a potential three year contract.  The new machine will cost $1

Sensitivity Analysis The only certain thing is that nothing is sure thing. Cost structures can be anticipated to vary over the time period. Management should vigilantly analyze

introduction on proess costing

Contract Costing It is a form of exact order costing, which is applied to relatively large cost units that normally get a considerable length of time to complete as an example

Cost Classification Bases Costs can be classified on either more or one of the given bases as: a) Are the costs dependent on the level of output as like variable or are the

Prepare a properly classified Cash Flow Statement for Sports Enterprises Ltd for the year ended 31st December 2011. Note that the Closing Cash at Bank Balance at 31st December 2011

The beginning inventory balances of Item X on August 1 and the purchases of the item during the month of August were as follows: August 1 Beginning Inventory 600 units @ $10.00