Accounting Vs. Financial Break-Even Points
Not what you're looking for?
Please help answer the following question.
A finance manager considers the accounting break-even point more important than the financial break-even point. Do you agree with the manager? Give reasons.
Purchase this Solution
Solution Summary
This posting involves accounting versus financial break-even points. It discuses whether an accounting break-even point is more important than the financial break-even point. Reasons are given. The explanation is given in 373 words.
Solution Preview
Problem: A finance manager considers the accounting break-even point more important than the financial break-even point. Do you agree with the manager?
Solution:
The accounting break-even point is the point of sales at which the earnings before interest and taxes is zero. That is the amount of contribution that is equal to the fixed cost.
The accounting break-even point is computed by:
BEP in units of output and sale = Fixed cost/contribution per unit.
Break-even point in terms of sales value is computed by:
Fixed cost/contribution margin ratio
Contribution ...
Purchase this Solution
Free BrainMass Quizzes
Income Streams
In our ever changing world, developing secondary income streams is becoming more important. This quiz provides a brief overview of income sources.
Basics of corporate finance
These questions will test you on your knowledge of finance.
Understanding Management
This quiz will help you understand the dimensions of employee diversity as well as how to manage a culturally diverse workforce.
Balance Sheet
The Fundamental Classified Balance Sheet. What to know to make it easy.
Team Development Strategies
This quiz will assess your knowledge of team-building processes, learning styles, and leadership methods. Team development is essential to creating and maintaining high performing teams.