What are the advantages of break even charts, Managerial Accounting

Assignment Help:

What are the Advantages or uses of break even charts

Computation of break even point or presentation of cost volume and profit relationship by way of break even charts has the following advantages :

1) Information provided by the breakeven chart is in a simple from and is clearly understandable even to a layman the whole idea of the problem is presented at a glance.

2)  The break even chart is very useful to the management for taking managerial decision because the chart studies the relationship of cost volume and profit at various levels of output. The effects of changes in fixed cost and variables costs at various levels of output and that of changes in the selling price on the profits can be depicted very clearly by way of break even charts.

3) The break even charts helps in very knowing and analyzing the profitability of different products under various circumstances.

4) A break even chart is very useful for forecasting (the cost and profits), planning and growth.

5) The break even charts is a managerial tool for control of costs as it shows the relative importance of fixed cost in the total cost of a product.

6) Besides determining the break even point profit at various levels of output can also be determined with the help of break even charts.

7) The break even charts can also be used to study the comparative plant efficiencies of business.

 


Related Discussions:- What are the advantages of break even charts

Identify and briefly describe four trends in macro market e, identify and b...

identify and briefly describe four trends in macro market environment which influence on the selected industry?

Determine the distribution cost and research cost, Determine the Distributi...

Determine the Distribution cost and Research cost Distribution cost: The cost of sequence of the operations which begin with making the packed product available for dispa

What is behind the wave of mergers in the banking industry, What is behind ...

What is behind the wave of mergers in the banking industry? A: Several economic factors have caused banking institutions to merge over the past several years. These factors inc

Joint product decisions, JOINT PRODUCT DECISIONS When a manufacturing C...

JOINT PRODUCT DECISIONS When a manufacturing Company carries out a process operation in which 2 or more joint products are made from a common process a number of decision troub

Budgetary styles, their definitions and the advantages and disadvantages

their definitions and the advantages and disadvantages

Cash and treasury management, Cash is a significant current asset for the o...

Cash is a significant current asset for the operations of business. Cash is the fundamental input that maintains business running smoothly and continuously. In excess of cash and l

What do you understand by marging of safety, Question: (a) A retail sto...

Question: (a) A retail store wants to evaluate how many units it must sell in order to earn a profit of Rs 10000 per month if the price of the unit is Rs 300, the average varia

Determine the price sensitivity, Price sensitivity Nagle has identified...

Price sensitivity Nagle has identified nine factors that contribute to price sensitivity and has also presents various methods or techniques to measure it. The factors that con

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