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Explain Break Even Analysis.
Break Even Analysis: This Analysis implies that at several points in the operations, total revenue equivalent total cost. This analysis is concerned with finding the point at which costs and revenues agree exactly - therefore the term 'Break even point'. The given figure portrays the Break Even Chart.
Breakeven point is the volume of output at that neither a loss is made nor a profit is incurred. This analysis can be carried out graphically or algebraically as given in the above diagram.
Determine the formula of the Economic Order Quantity. The formula for Economic Order Quantity (EOQ): EOQ = √((2x C O x D)/(C H ) Here D = Annual demand (units)
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