Break even analysis, Managerial Accounting

BREAK EVEN ANALYSIS

Break even analysis is mainly used to explain the relationship between the cost incurred, the volume operated at and the profit earned. To compute the breakeven point we let

S be selling price per unit
Vu be variable cost per unit
Q be break-even quantities
F be total fixed costs

At Breakeven point:

Total revenue (TR) = Total Cost (TC)

Total revenue will be given by SQ while Total cost (TC) = Vu Q + F

At break-even point (BEP) therefore:

SQ = Vu Q + F

Q =  F
     S- Vu


B.E.P (in units) =   F          
                       S- Vu   

Posted Date: 12/5/2012 7:07:40 AM | Location : United States







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

Write discussion on Break even analysis
Your posts are moderated
Related Questions
how do i use least squares method to solve semi average problem?

Calculate the charges for single and double rooms assuming that the authority wishes to make a RM10, 000 profits an accommodation


Manufacturing cost data for Sassafras Company, which uses a job order cost system, are presented below. Indicate the missing amount for each letter. Assume that in all cases manufa

Significance points of Variance The following significant points must be kept in mind: Controllability:   Controllability should also influence the decision whether t

Explain the Shut down cost A cost which will be still be required to be incurred even though a plant is closed or shut down for a temporary period. Ffor example the cost of

Scorecard The traditional approach to the monitoring organizational performance has focused on the financial measures and the outcomes. Increasingly, companies are realizing th

Advance Factoring and Maturity Factoring: In both recourse and non-recourse factoring whether the factor advances cash against book debts to the client instantly on assignment

Carrying costs of inventory These are costs incurred because the firm has decided to maintain inventories. They generally consist of: •    Stock-out costs •    Insurance co

Batch size of one Set up time is the amount of time needed to adjust tools and to retool for various product. Long set ups a change over time make the production of batches wit