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 opportunity costs of capital at tep, How would the EBQ change if th...

How would the EBQ change if the set-up costs were reduced by 50 percent, and the holding costs were reassessed by 40 percent, taking account of the opportunity costs of capital at

Explain marketing decisions without marketing research, Is it possible to m...

Is it possible to make sound marketing decisions without marketing research? What advantages does research offer to the decision maker over seat-of-the-pants decision making?

Explain progressive insurance''s products, 1 Insurance products are service...

1 Insurance products are services. Describe Progressive Insurance's products in terms of the four characteristics of services. How does Progressive deliver value to its customers?

Explain facility for your logistical operations, What is the most important...

What is the most important factor to keep in mind when considering a facility for your logistical operations?

Explain own personal devices used for work, BYOD and we are reading so much...

BYOD and we are reading so much about BYOD (bring-your-own-device). Are the mobile devices you use for business owned by the company or are they your own personal devices used for

Explain technology have an impact on capacity planning, In what ways does t...

In what ways does technology have an impact on capacity planning?

Upper bound, Customers arrive at a fast food restaurant with one server at ...

Customers arrive at a fast food restaurant with one server at a mean rate of 30 per hour. The server has just resigned, and the two candidates for the replacement are X (fast but

Needs for trade- offs - business strategy, Needs for Trade- offs - Business...

Needs for Trade- offs - Business Strategy In recent years another reason for questioning the need for trade-offs has arisen. In manufacturing industries great efforts have bee

Developing a service strategy - operations strategy, Developing a Service S...

Developing a Service Strategy - Operations Strategy The figure below gives an outline of the three steps of developing an operations strategy based on the Platts-Gregory appro

Ethical for organizational managers to try to get access, Do you belive it ...

Do you belive it is ethical for organizational managers to try to get access and scrutinize the Facebook pages of employees or job applicants?

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