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Break Even Point: It is the point where firm's at no profit no loss situation/position that's why it is called break-even point. So at this point firms has no profit no loss and it is the point where firm's able to achieved all expenses of operation and after this point whatever sales made by firm goes to profit of company.
What else can I help you with?
If a firms fixed financial costs decrease the firms operating breakeven point will do what?
decrease <--------WRONG!!!!! The operating breakeven point will remain unchanged.
When marginal revenue equals marginal cost?
At this intersection point on a graph, firms will earn maximum profit, even if this point is under average total cost.
Why do firms produce multiple products?
Firms produce multiple products because the aim is to be a producer that maximizes profit. Firms produce multiple products to get maximum profit.
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 a firms fixed financial costs decrease the firms operating breakeven point will do what?
decrease <--------WRONG!!!!! The operating breakeven point will remain unchanged.
Break even price?
Breakeven price is that price where firms are at no profit and no loss stage.
If variable labor costs decline other things are held constant how will this effect a firms breakeven point?
breakeven point will decrease
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.
What percentage of the contribution margin is profit on units sold in excess of the breakeven point?
50%
What does term of breakeven mean?
The term 'break-even' refers to the point at which a company has no profit and no debts. They have no losses or gains.
What would the sales be if the company desires a profit of 104300 in sales and the break even point in dollar sale for Rice Company is 352000 and the company contribution margin ratio is 35 percent?
Break even sales = fixed cost + desired profit / contribution margin ratio Fixed cost = breakeven point sales * contribution margin Fixed cost = 352000 * 0.35 = 123200 Breakeven point = (123200 + 104300 ) / 0.35 Breakeven point = 332857
How does break even analysis helps in profit planning discuss and explain the terms?
Breakeven analysis helps the management to find out the point of sales which must be achieved to at least recover the amount spent on manufacturing of product and after that it also helps to find out the point from actual sales to breakeven sales before they start losing as well as to find out the required profit point as well.
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.
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.
Breakeven point in units?
The Formula of Breakeven point (in units)= Fixed Cost / Contribution per unit
