Break-even point is that point at which there is neither profit nor loss. It is at point costs are equal to sales. It is otherwise called as balancing point‚ neutral point‚ equilibrium point‚ loss ending point‚ profit beginning point etc. After BEP is achieved‚ all the further sales will contribute to profit. At BEP‚ Sales – Variable cost = Fixed costs. OR Contribution = Fixed costs. Break-even analysis Break-even analysis is an analytical technique that is used to determine the probable
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Break-Even Analysis FIN/200 July 29‚ 2010 Justin Henegar 13. Healthy Foods‚ Inc.‚ sells 50-pound bags of grapes to the military for $10 a bag. The fixed costs of this operation are $80‚000‚ while the variable costs of the grapes are $.10 per pound. a. What is the break-even point in bags? 80‚000/5= 16‚000 bags- This is the company’s break-even point because the variable per unit would be $5.00 if it’s .10 per pound with a 50-lb bag. The other answer I received was 8‚080 bags but this would
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is the Break even. The Break even point is the point at which revenue is exactly equal to costs. At this point‚ no profit is made and no losses are incurred. The break even point can be expressed in terms of unit sales or dollar sales. That is‚ the break even units indicate the level of sales that are required to cover costs. Sales above that number result in profit and sales below that number result in a loss. The break even sales indicate the dollars of gross sales required to break even. The determination
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BREAK EVEN ANALYSIS Introduction Break-even analysis is a technique widely used by production management and management accountants. It is based on categorising production costs between those which are "variable" (costs that change when the production output changes) and those that are "fixed" (costs not directly related to the volume of production). Total variable and fixed costs are compared with sales revenue in order to determine the level of sales volume‚ sales value or production at which
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BREAK-EVEN POINT A company’s break-even point is the amount of sales or revenues that it must generate in order to equal its expenses. In other words‚ it is the point at which the company neither makes a profit nor suffers a loss. Calculating the break-even point (through break-even analysis) can provide a simple‚ yet powerful quantitative tool for managers. In its simplest form‚ break-even analysis provides insight into whether or not revenue from a product or service has the ability to
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TOTAL REVENUE APPLICATION At a price of $3 each‚ SHAPE magazine sells 1.25 million copies of its magazine targeted to young women seeking a healthier lifestyle. If the price is increased to $3.25 each‚ only 1 million copies will be sold. Fixed costs are $1 million and unit variable costs are $0.50 per magazine. From the information provided here‚ what is SHAPE magazine ’s total revenue‚ obtained at the higher price? a. $3‚750‚000 b. $3‚250‚000 c. $2‚125‚000 d. $1‚625‚000 e. $675
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a) What is Break Even point? Break even point is the point at which income and expenses of are totally equal. So the business has not made any profit or any loss at this point. But when it comes to the total value of expenses is higher than total profit‚ the organization will suffer losses. Losses will result the opposite effect of profits. An organization that suffer losses may be forced to decrease their operational output. The reduction may consist of reducing their employees‚ shutting down their
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Break even analysis is an important part in production management and decision making. In this assignment‚ the key elements of the break-even analysis will be discussed. The key elements of break-even analysis are fixed cost‚ variable cost‚ total revenue‚ break-even point and margin of safety. Although break-even analysis is very useful‚ it has disadvantages. Break-even analysis is based on the production cost of the company which includes the fixed cost and variable cost. Then the total cost of
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Chapter 7 - [ cost – volume – profit Analysis leverage ] Cost – Volume – profit Analysis {or Break ever analysis ) The break even point (BEP) man be defined as that level of sales at which total revenue in equal to total costs x the co will make no profit x also will have no loss. The volume of sales corresponding to BEP is known as break even output . If the co producer & sells less than the BE output it would in an a loss &if it producer &sells more than the BE output it
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article: Break-even (economics) In economics & business‚ specifically cost accounting‚ the break-even point (BEP) is the point at which cost or expenses and revenue are equal: there is no net loss or gain‚ and one has "broken even." A profit or a loss has not been made‚ although opportunity costs have been "paid‚" and capital has received the risk-adjusted‚ expected return.[1] It is shown graphically as the point where the total revenue and total cost curves meet. In the linear case the break-even
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