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 project procurement management, When concerned with project procure...

When concerned with project procurement management regarding a project, list the different steps of the supply process and reasons why or why not the project would have been more s

Formulate a mathematical model for the problem, Question: Nostromo Ltd ...

Question: Nostromo Ltd is specialized in electrical installation for space ships. This electrical installation process require a certain amount of drilling and wiring. The dril

Explain variable costs, Explain Variable costs. Variable costs converse...

Explain Variable costs. Variable costs conversely, tend to vary directly along with the volume of output. Illustrations of variable cost are: - * Direct production labour co

Explain production budget, Explain production budget. A production bu...

Explain production budget. A production budget may be made by production manager in consultation along with his assistants after obtaining the sales Budget. A production budg

Define what is divine command theory, What is Divine Command theory? Given ...

What is Divine Command theory? Given the power gap between God and humanity how do we make the moral demands work? How do we make Divine command theory work?

Design an appropriate control chart, This assignment requires you to look i...

This assignment requires you to look in some detail at one quality issue arising in your organisation. Some of the exercises in Units 4 and 5 have already suggested that you consid

Why scheduling resources is important, Of the six reasons that scheduling r...

Of the six reasons that scheduling resources is important, select which one of the six reasons appears to be the top priority and justify your position.

Procedure of production planning, Procedure of Production Planning 1. ...

Procedure of Production Planning 1. Production Material: The  information is  derived  from an analysis  for the production  into its  separate components  and units  to det

Find annual sales is thousands of bottles, Problem 3-5 A cosmetics manufact...

Problem 3-5 A cosmetics manufacturer's marketing department has developed a linear trend equation that can be used to predict annual sales of its popular Hand & Foot Cream. Ft = 80

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