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Breakeven Point Analysis

RE:"-If the firm was to the right of the curve or positive from the break even point means that fixed costs are high and variable costs are low."

RE:"-If the firm is to the left or negative it means they have low fixed costs and higher variable costs

Does moving to the right (or left) of the BE point cause variable costs (per unit produced) to change?

Does moving to the right (or left) of the BE point cause fixed costs to change?

Solution Preview

Variable costs are costs which changes directly in proportion to the level of sales in dollars or units sold. For example direct material, direct labor, sales commission, bonus etc.
Fixed costs are those costs which remain the same irrespective of ...

Solution Summary

The solution performs a break even point analysis for a firm.

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