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What is a business break-even analysis?

The break- even analysis identifies the break-even point, which is the level of sales and expenses, including loan principal payments, at which a business has no profit and no loss.


How does a break even analysis of diamond cutting and polishing business or business plan looks like?

A break even analysis of any business would identify the market, identify the source of the raw materials, account for expenses and determine how much to buy and how much to sell in order to break even.


State the importance of break even analysis in business decisions?

To decide the amount of units must be produced, in order to reach the break-even point, in where the total revenues r equal to the total costs. And it helps the firm to set the best price for those output also.


What is the usefulness of break even analysis to management?

Breakeven analysis guides the management that how much units of product must be produce to recover the fixed cost as well as guides the management that how many units to sell to earn specific profit.


What is another name for break-even analysis?

Cost-volume-profit analysis (CVP), or break-even analysis,


What might happen if a business does not know its break even point?

Understanding the company's break-even point is important to small-business owners. Many owners desire to know how much they need to achieve in sales to realize a profit. The components of break-even analysis include sales revenue, fixed and variable costs, and the contribution margin. You should understand the components of the break-even point to determine how much your company needs to achieve in total sales or unit sales to break even. The break-even point helps managers make important business decisions to achieve the company's desired income.


Explain the use of marginal analysis for break-even and profit-maximizing decisions?

In each case the process involves comparing costs and benefits of decisions that are made in small, incremental steps.


What are the advantages of break even?

Following are advantage of break even:It helps management to identify the number of units sold to cover fixed costsIt helps the management in profit planningIt helps management for effeciancy


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.


What are the differences between cost volume profit analysis and break even profit analysis?

there no difference between break even profit analysis and cost volume profit analysis


Why is breaking even important?

Break even is the point when your income is equal to your expenses, so reaching the break even is obviously essential. Most off the time the break even point will be set of both fixed and variable cost, using this break even analysis can help you forecast your profit (or loss) based on the forecasted sales figures. This is one of the first analysis you should do when thinking off starti g a business.


Is break-even point a quantitative analysis model?

Yes. Because break even analysis determines the sales level needed to break even in units or dollars (both are numbers) so it is quantitative.