Show the break-even charts, Cost Accounting

Assignment Help:

Q. Show the Break-even charts?

Refers graphically profit and losses at different levels of sales volume achieved.

501_Show the Break-even charts.png

  • When sales revenue is greater than total cost it means that profits are being generated.
  • When sales revenue is less than total cost it means that losses are being incurred.
  • When sales revenue equals total costs (intersection of sales revenue lineand total costs line) it means that no loss or profit is occurring. This is break-even point.
  • Variable costs vary directly with output, as more output is produced then more variable costs are incurred.
  • Fixed costs don't vary with output and are constant for a range of output produced. They are incurred even when there is no output at the beginning of production. The reason behind this is they are costs which must be incurred to support manufacture like machinery or a warehouse.
  • Total costs line is a representation of combined variable and fixed costs. That is why at nil output it has a cost which signifies fixed costs, and then as output increases total cost line varies with it and in parallel with the variable cost line.
  • The margin of safety is extra amount of sales which is expected to be generated when budget or actual sales is compared to break-even level of sales.

Related Discussions:- Show the break-even charts

Cost concepts / classification of costs, COST CONCEPTS / CLASSIFICATION OF ...

COST CONCEPTS / CLASSIFICATION OF COSTS 1. According to functions Administration cost / office cost Selling cost Production cost / factory cost / manufacturing c

Changes in product mix, Changes in Product Mix A change in product mix...

Changes in Product Mix A change in product mix in which individual products have different contribution will contain different contribution. Sales ratio will conclude in a cha

Calculate the manufacturing cost per unit, the following activities relatin...

the following activities relating to indirect production costs: Activity Activity Costs Cost Drivers Machine Setup $180,000 1,500 setup hours Materials Handling $50,000 12,500 poun

Prepare a regular income tax return, Facts:   James (age 58, SS# 123-34-...

Facts:   James (age 58, SS# 123-34-4439) and Martha (age 56; SS# 233-23-9050) Williams are married. James works at a major retailer as manager of the early shift. Martha is a nu

Change in working capital, Current assets 180.00   ...

Current assets 180.00   232.00 Less: Current Liabilities 80.00   105.00 Working Capital

Variable cost, how variable cost help in decision making.with suitable exam...

how variable cost help in decision making.with suitable example

Calculate the group profit and loss, Using the chosen company from Bursa Ma...

Using the chosen company from Bursa Malaysia, prepare a consolidated accounts assuming that the chosen company acquire Sure Cargo Behard at 80% of its ordinary shares. Given bel

Government and nonprofit accounting, I need project help in Government and ...

I need project help in Government and nonprofit accounting, can you help me in look out this problems?

#title., prepare cost accounting sheet

prepare cost accounting sheet

Write Your Message!

Captcha
Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd