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An example of a case where a cost and a revenue function do not have a break-even point.?
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How do you determine break even point when the unit price isn't given?
if sales revenue is provided instead of unit price then breakeven point can be determine by deducting variable costs from sales revenue and so on dividing fixed cost with contribution margin.
If a firms fixed financial costs decrease the firms operating breakeven point will do what?
decrease <--------WRONG!!!!! The operating breakeven point will remain unchanged.
What happens to the breakeven point when you increase the selling price?
Increase in selling price reduces the breakeven point because due to increase in price contribution margin ratio also increases.
Which is more important accounting break-even point or financial break-even point?
The financial breakeven point is a more relevant measure than the accounting breakeven point because the accounting breakeven point does not consider the initial investment in the project. With any investment, one has the option to venture into it, or to take a less risky route and invest (in a bond or a stock that would give them a more guaranteed return). Thus an accounting breakeven, considers all cost, except the opportunity cost of the capital invested in project, and this is something that the financial breakeven considers. Financial breakeven point is the point where NPV is greater than or equal to zero: the point where there is economic value added® (a term trademarked by Stem-Stewart). This is because in calculating the financial breakeven, the formula includes the opportunity cost of capital: the initial investment divided by the timeannuity factor at the discount rate (where the discount rate is the opportunity cost of capital).
If the price per unit decreases because of competition but the cost structure remains the same will the breakeven point rise?
Yes breakeven point will rise because contribution margin per unit reduces that's why more units require to recover fixed cost.
What does breakeven point mean?
Breakeven Analysis is the process of categorizing costs of production between variable and fixed components and deriving the level of output at which the sum of these costs, referred to as total costs per unit become equal to sales revenue. The analysis helps to determine the 'Breakenev Point' from this point of equality of sales revenue with total costs. At the breakeven point, the production activity neither generates a profit nor a loss. Breakeven analysis is used in production management and Management Accounting.
What is the breakeven point in terms of both units sold and sales revenue?
Breaven point is the point of sales which must be acheived to cover all the expenses and to start earning profit.
What is break even point in cost accounting?
Breakeven point is that point at which company at no profit no loss point that means that much revenue is required to earn to completely recover all the expenses incurred.
Does break even point and break even analysis means the same?
Breakeven point is the point where firm has no profit no loss while breakeven analysis is the process of finding out the breakeven point.
Breakeven point in units?
The Formula of Breakeven point (in units)= Fixed Cost / Contribution per unit
How do you determine break even point when the unit price isn't given?
if sales revenue is provided instead of unit price then breakeven point can be determine by deducting variable costs from sales revenue and so on dividing fixed cost with contribution margin.
How do you calculate the breakeven point?
Formula for Breakeven point: Breakeven point = Fixed Cost / Contribution margin ratio Contribution margin ratio = Sales / contribution margin Contribution margin = sales - variable cost
If variable labor costs decline other things are held constant how will this effect a firms breakeven point?
breakeven point will decrease
If a firms fixed financial costs decrease the firms operating breakeven point will do what?
decrease <--------WRONG!!!!! The operating breakeven point will remain unchanged.
How do you calculate breakeven point?
breakeven point (units) = fixed costs/contribution contribution = selling price - variable costs per unit
The breakeven point is the point at which the?
where all your Fixed Costs are covered. To find the number of units at which you will breakeven you divide fixed costs by the contribution per unit
Cost of goods sold is equal to?
breakeven point
