Break even analysis, Managerial Accounting

Assignment Help:

BREAK EVEN ANALYSIS

Break even analysis is mainly used to explain the relationship between the cost incurred, the volume operated at and the profit earned. To compute the breakeven point we let

S be selling price per unit
Vu be variable cost per unit
Q be break-even quantities
F be total fixed costs

At Breakeven point:

Total revenue (TR) = Total Cost (TC)

Total revenue will be given by SQ while Total cost (TC) = Vu Q + F

At break-even point (BEP) therefore:

SQ = Vu Q + F

Q =  F
     S- Vu


B.E.P (in units) =   F          
                       S- Vu   


Related Discussions:- Break even analysis

Inventory planning and control, INVENTORY PLANNING AND CONTROL The main...

INVENTORY PLANNING AND CONTROL The main goal of "inventory control" is to discover and maintain the optimum level of investment in all types of inventories, from raw materials

Objectives of working capital decisions, After going through this section, ...

After going through this section, you must be capable to: Know the concept and characteristics of working capital; Identify with the difference among net working capital

What is competition oriented pricing policy, Competition oriented pricing p...

Competition oriented pricing policy Most companies fix the price of their products after a careful consideration of the competitor's price structure. Deliberate policy may be f

Describe the nature of standard costing, Describe the Nature of standard co...

Describe the Nature of standard costing The system of standard costs (standard costing) is a management technique of using predetermined costs (standard costs) for evaluating p

Cost estimation and management of overhead cost, How might a company use re...

How might a company use regression results to manage overhead costs?

The basic eoq model-the deterministic models, THE BASIC EOQ MODEL This ...

THE BASIC EOQ MODEL This is the most simple of all the models discussed. In addition to the general assumptions which relate to all deterministic models (i.e. certainty of all

State the factors of cvp, State the factors of CVP The three factors of...

State the factors of CVP The three factors of CVP analysis I e cost volume and profit are interconnected and dependent on one another . for example profit depends upon sales se

Analysis of credit file, Analysis of Credit File: Credit file is a compila...

Analysis of Credit File: Credit file is a compilation of each the relevant credit information of the customer. All the credit information collected throughout the credit informati

Markov properties, Markov Properties 1) Transition probabilities are de...

Markov Properties 1) Transition probabilities are dependent only on the current state of the system i.e. provided that the current state is recognized; the conditional probabil

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