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it is not always possible to predict what will happen to revenues or costs as output increases.
It is only a forecast so in reality the figures can vary greatly. the business would need to take heed to the cost of financial accounting and the rate at which the value for money can change.
It also assumes that all products produced will have completed the whole production stage and be sold. Again, in reality, many businesses would still have stock in working progress and unsold stock; thus not showing a true representation of the data.
Sometimes it can be that the costs incurred by making and selling the product can vary so many managers find that classifying them as either fixed or variable can prove problematic.
Charley Lowe
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Limitation of break even analysis?
Limitation of break even is that it says that all costs remain same while it is not possible in actual world even then it is quite useful for analysis.
The difference between Break Even Concept and Break Even Chart?
its a pinaplle under the sea
Can you explain the break even chart in simple words?
you are ugly
What are the objective of break even chart and its significance?
It is cheap to carry out and it can show the profits/losses at varying levels of output. It also provides a simple picture of a business - a new business will often have to present a break-even analysis to its bank in order to get a loan.
A hyperlink cannot be linked to what?
In Excel, it is not possible to hyperlink to a chart. However, a reasonable solution to this limitation is to hyperlink to a cell directly below the chart.
How do you calculate break even point?
1) By drawing up the Break-even chart and determine the intersection point between the Total revenue and Total cost curve. 2) Using the break even quantity formula = Fixed cost / per unit Contribution ( to find break even in $, you simply use the above result and times it with the selling price.)
An analytical tool frequently employed by managerial economists is the break even chart an important application of cost functionExplain this statement?
inertia
The total cost is the sum of what?
When you see TC = Total Costs on a break even chart it stands for Variable, Semi-variable and fixed costs....thus the total cost.
Can you break a ruby?
Yah, with any rock that has a 9 or more on the mohs chart.
What allows you to break down what you know into facts or opinions.?
fact and opinion chart
What allows you to break down what you know into facts or opinions?
fact and opinion chart
What are the limitations of bar chart?
The bar chart is a great tool to use as a visual for presentations or reports. The limitation of bar charts is that it is best used when presenting only two to three variables. It is also best used only when there is discrete data to present.
