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

How many coupon bonds would you need to issue, 1. Suppose your company need...

1. Suppose your company needs to raise $30 million and you want to issue 30-year bonds for this purpose. Assume the required return on your bond issue will be 8 percent, and you're

Cost accountant and cost analysis, Cost Accountant and Cost Analysis ...

Cost Accountant and Cost Analysis Cost Accountant Is a member of chief accounting officers department? And he is responsible for collecting product costs and preparing ex

Uniform Capitalization rules, Are public service corporations subject to un...

Are public service corporations subject to uniform capitalization rules?

Provision for bad and doubtful debts, A provision must be made in advance f...

A provision must be made in advance for those debts whose recovery is uncertain and to writing off bad debts. Each enterprise, depends on their past experience, make a provision fo

Quantitative and qualitative information - cost accounting, Quantitative an...

Quantitative and Qualitative Information in Accounting Systems The availability of information is the lifeblood of any type of management and cost accounting system. It is vi

Compute the internal rate of return, ABC bond is a 20-year bond with face v...

ABC bond is a 20-year bond with face value $1000. The coupon payment is $25 per 6 months. The semi-annual yield is 4%. Use the PV function in Excel (or equivalent) to Önd the price

Piece wage rate, what is Taylor''s differential piece rate plan

what is Taylor''s differential piece rate plan

Calculate cost for each unit, Dropping a segment - George's Grill analyzes ...

Dropping a segment - George's Grill analyzes profitability of three operating units: restaurant, bar, and billiards room. Revenues, variable costs, and attributable fixed costs (wh

Manufacturing Costs, Is there a way to figure out labor cost and factory i...

Is there a way to figure out labor cost and factory inventory when no direct information regarding them is available.

Expenditure for the base period and the current period, 1. The table below ...

1. The table below gives data for Southland where there are three consumption goods: bananas, coconuts and grapes. Goods Quantity in base period basket

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