Purchase Solution

BREAK EVEN ANALYSIS

Not what you're looking for?

Ask Custom Question

Detailed explanation and calculation on how to calculate break even and use it to solve business problems and make decisions.

Purchase this Solution
Solution Summary

Detailed explanation and calculation on how to calculate break even and use it to solve business problems and make decisions.

Solution Preview

SOLUTION
Basic Information
Number of units = 3,000
Variable manufacturing cost $300 per unit
Variable marketing cost $50
Total Variable Cost per unit = $300 + $50 = $350

Fixed mfg cost $120 per unit
Fixed mkg cost $140
Total Fixed Cost per unit = $120 + 140 = $260
Total Fixed Cost = $260 X 3,000 units = $780,000

Selling Price = $740 per unit

Question 1
a. The breakeven level in units
Total Revenue - Total Variable Cost - Total Fixed Cost = Income
$740a - $350a - $780,000 = 0
$390a = $780,000
a = $780,000/390
a = 2,000 units
Breakeven Volume = 2,000 units

b. The breakeven level in revenue ...

Purchase this Solution
Free BrainMass Quizzes
Introduction to Finance

This quiz test introductory finance topics.

Organizational Leadership Quiz

This quiz prepares a person to do well when it comes to studying organizational leadership in their studies.

Managing the Older Worker

This quiz will let you know some of the basics of dealing with older workers. This is increasingly important for managers and human resource workers as many countries are facing an increase in older people in the workforce

Writing Business Plans

This quiz will test your understanding of how to write good business plans, the usual components of a good plan, purposes, terms, and writing style tips.

Academic Reading and Writing: Critical Thinking

Importance of Critical Thinking

View More Free Quizzes
Related BrainMass Solutions

  • Sensitivity and Break-even Analyses

    Break-even analysis is a device for determining the point at which sales will just cover total costs. or the break even point for a product is the point where total revenue received equals total costs (TR=TC).

  • Simple & Brief Break-Even Analysis

    353003 Simple & Brief Break-Even Analysis What is a break-even analysis? How can I determine the break-even point? What formula do I use and what are the key variables? A break the break-even analysis determines the break-even point.

  • break-even analysis

    63713 What are the various uses for break-even analysis? Discuss the various uses for break-even analysis.

  • What is break-even analysis and how does it work with cost

    493650 Break-Even Analysis and How Does It Work with Cost What is break-even analysis and how does it work with cost-volume-profit analysis?

  • This post addresses break-even analysis and sales.

    474213 break-even analysis (a) Break-even analysis is of limited use to management because a company cannot survive by just breaking even. Do you agree? Explain. (b) Total fixed costs are $22,000 for Forrest Inc.

  • Break-Even Point for Managerial Accounting

    73435 Break-even point I need to determine what is meant by the term break-even point in regards to Managerial Accounting? I also need to name 3 approaches to break-even analysis and explain how each approach works.

  • Various uses for break-even analysis

    47320 Various Uses for Break-Even Analysis Discuss the various uses for break-even analysis. In general, Break even point is the point at which gains equal losses.

  • CVP Analysis and Break-Even Analysis

    CVP ANALYSIS AND BREAK EVEN POINT CVP can be calculated a couple different ways. The most common is to figure out the break even analysis-either for required sales volume, or minimum price point.

  • Break-Even Analysis

    The revenue is P(40)=$280 Break-Even analysis is demonstrated.

  • Break-even analysis

    23182 Break-even analysis Can you please explain some of the potential ways that break-even analysis can be used by management to make better decisions.

View More Related Solutions