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Explain the importance of break even analysis

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Reference no: EM132468948

Problem 1) Break even point analysis is an important financial analysis tool used by business owners.

i) Explain the importance of break even analysis.

ii) What are its advantages and limitations ?

Problem 2) Robert Industries produces a single product. The following are the financial numbers related to this product.

Selling Price = $250 per unit

Variable cost = $100 per unit

Fixed Costs = $56,000

The Management wants to know the following :

1. Contribution per Unit

2. Contribution Margin ratio

3. Break even point in Units

4. Breakeven Point in sales

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

Reference no: EM132468948

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