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

Compute what is its cost of common equity, The earnings, dividends, and com...

The earnings, dividends, and common stock price of Carpetto Technologies Inc. are expected to grow at 8% per year in the future. Carpetto's common stock sells for $27.75 per share,

Explain asset has negative risk, Suppose rf is 5% and rM is 10%. According ...

Suppose rf is 5% and rM is 10%. According to the SML and the CAPM, an asset with a beta of -2.0 has a required return of negative 5% [= 5 - 2(10 - 5)]. Can this be possible? Does t

Define the reasons why a firm would seek iso registration, Discuss the reas...

Discuss the reasons why a firm would seek ISO 9000 registration.

Explain ethics training back to the workplace be maximized, Define the term...

Define the term, transfer of learning. (2) A critical issue in training is the transfer of training, and ethics training is no exception. How could the transfer of ethics training

Explain cross-cultural repatriation, Preparing employees to work across nat...

Preparing employees to work across national and cultural boundaries is known as: Answer (1) cross-cultural repatriation. (2) Cross-cultural preparation. (3) Culture shock. (4) Reve

Resource utilisation & work in progress in organisation, What effect does y...

What effect does your organisation's facility layout have on the following (where appropriate): inter-process movement; health & safety; congestion; resource utilisation; work-in-p

Control charts for variables, Control Charts for Variables  Two comple...

Control Charts for Variables  Two complementary charts are commonly used for the statistical control of process variables. One controls the process mean by monitoring the mean

Explain theories in management response, Theories in Management Response co...

Theories in Management Response consider the various management theories of the past 100 years. What are the benefits of understanding these theories and their evolution? How are t

Explain what is the multifactor percentage change in product, 1. Long Beach...

1. Long Beach Bank employs three loan officers, each working eight hours per day. Each officer processes an average of five loans per day. The bank's payroll cost for the officers

What the manager of a regional warehouse must decide, The manager of a regi...

The manager of a regional warehouse must decide on the number of loading docks to request for a new facility in order to minimize the sum of dock costs and driver-truck costs. The

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