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BREAK EVEN ANALYSISBreak 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 unitVu be variable cost per unitQ be break-even quantitiesF be total fixed costsAt 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 + FQ = F S- VuB.E.P (in units) = F S- Vu
Requirements of a good budgeting system Following are the requirement of a good budgeting system: 1) Budgeting process should be backed and supported by the chief executive
Advantages of incremental budgeting a) The budget is stable and change is gradual b) Managers can operate their departments on a steady basis c) The system is relatively
So as to makes sure that the receivables are collected in occupied and on due date by the customers, prior information of their credit worthiness must be obtainable. This informati
Explain the Organization and Control System of a Car Company? A car company along with its three product lines. Line A is planned at the luxury segment, Line B at the upscale s
Graphic method of break even analysis or break even chart The break even point can also be computed graphically. A break even chart is a graphical representation of marginal co
INVENTORY CONTROL The activities of a business during a financial year combine investment projects in progress with new projects commencing and others terminate within the year
Terms of payment vary broadly in practice. At one conclusion, if the seller has financial resources, she or he may extend liberal credit to the buyers, conversely the buyer pays in
Calculation
Granger products had the following transactions for the just completed month. The company had no beginning inventories. a)$75,000 in raw materials were purchased for cash. b) $7
Recommend whether marginal or absorption costing should be use for internal monthly reporting
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