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Define the term break-even

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Reference no: EM133035034

Question - a) Robest Industries produces only one Product. The following revenues and cost have been estimated for the forthcoming month:

Selling price, $250 per unit (SP)

Variable cost, $100 per unit (VC)

Fixed Cost, $56,000

The Manager of the firm wishes to know the following:

1. Calculate contribution margin per unit.

2. Calculate contribution margin ratio.

3. Calculate BEP in units.

4. Calculate BEP in sales.

5. Calculate sales value in $ to earn profit of $50,000.

b) Define the term 'Break-even'. Explicit the importance of Break-even Analysis which is a critical step in financial analysis.

Reference no: EM133035034

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