Demerits of break even point, Cost Accounting

DEMERITS OF BREAK EVEN POINT

1. It pays no attention to considerations like effect of government policy changes, changes in the marketing environment etc

2. Fixed cost, entire costs cannot be represented as straight lines

3. It is hard to handle advertisement expenditure

4. Semi-variable costs are ignored

5. It ignores economies of scale in production

6. Fixed costs also may alter in the long run

7. Volume of production and volume of sales are for all the time not identical

8. Selling price may or may not be the identical

Posted Date: 10/15/2012 7:09:21 AM | Location : United States







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