How break even analysis helps in solving the problems, Operation Management

Assignment Help:

How Break even Analysis helps in solving the problems.

Break even Analysis assists solving the problems of following:

 (a) What volume of sales will be necessary to cover?

  - A reasonable return of capital in use

 - Ordinary and preference dividends

 - Reserves

(b) To calculate costs and revenues for all possible volumes of output to fix budgeted sales

(c) To get the price of an article to provide the desires profit

(d) To find out the variable cost per unit

(e) To evaluate a number of business enterprises through arranging their earnings in order of magnitude.

The Break Even Point (BEP) can be computed by using the relation as follows:

BEP = F/(1-V/P)

Here F is fixed cost and V is variable cost per unit or total variable cost and here P is the selling price of each unit.


Related Discussions:- How break even analysis helps in solving the problems

Explain is there a best employment process- stepwise, Is there a best emplo...

Is there a best employment process, stepwise? What would you outline and why? What must steps should come first, and last?

Trade off between delivery and flexibility, Trade off Between Delivery and ...

Trade off Between Delivery and Flexibility Pagell et al (2000) argue that the trade-off concept is based on Skinner's quandary that a manufacturing plant could not be configur

Process of reengineering according to hammer and champy, Explain the proces...

Explain the process of reengineering according to Hammer and Champy. Hammer and Champy (1993) explained the process of reengineering as "the basic rethinking and radical redesi

Explain lean relates to an organization being agile, a. Do you think lean r...

a. Do you think lean relates to an organization being agile? b. Would implementing lean into an organization lead to a competitive advantage? if yes, explain, how and what types

Define the five-component model of an information system, Explain the five-...

Explain the five-component model of an information system. How can you use them?

Give expectancy theory claims that motivation is a function, Expectancy the...

Expectancy theory claims that motivation is a function of Answer efforts, performance, and rewards. individual traits and supervisory skills. aptitude, training, and op

What are the demand management strategies, What are the demand management s...

What are the demand management strategies? Demand management strategies: It is aims to affect customer demand levels at exact times, so as to match demand closer to the o

Prepare fraud risk factor for company - fraud risk asessment, A formal frau...

A formal fraud risk assessment ("FRA") is an important element of an entity's' antifraud programs and controls. Companies must specifically consider their controls to prevent and d

Calculate the expected value of perfect information, Clay Why bark, a soft-...

Clay Why bark, a soft-drink vendor at Hard Rock Cafe%u2019s annual Rockfest, created a table of conditional values for the various alternatives (stocking decision) and states of na

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