--%>
Assignment Help - homework help

Introduction of the term Break Even Point

Give a brief introduction of the term Break Even Point. How does BEP aid in making business decision?

E

Expert

Verified

Break Even Point (or BEP) is a quantity of sales where there is neither profit nor loss. Which means contribution is sufficient to cover the fixed costs.

Therefore, we can say that Contribution = Fixed Cost

Any contribution generated after BEP will straight result in profits as the fixed costs are completely covered now. BEP can be evaluated in two ways:

In phrases of Quantity-

Fixed Costs / Contribution per unit

In phrases of Amount-

(Fixed Costs) / (P/V Ratio)

   Related Questions in Managerial Economics

  • Q : Elasticity of demand for labor and type

    The relationship between the elasticity of demand for labor and the elasticity of demand for a specific type of output the labor produces is: (1) uniformly negative. (2) uniformly positive. (3) zero. (4) curvilinear. (5) highly variab

    		•
  • Q : Equal pay for equal work rule Rigid

    Rigid enforcement of “equal-pay-for-equal-work” law would: (w) raise the wage of minority workers who had been discriminated against. (x) lower the wages of “favored” non minority workers who had received higher wages before. (

    		•
  • Q : Introduction of the term Break Even

    Give a brief introduction of the term Break Even Point. How does BEP aid in making business decision?

    		•
  • Q : States the Demand Forecasting in terms

    States the Demand Forecasting in terms of production?

    		•
  • Q : Equilibrium of the consumers of the two

    identify two goods consumed by the majority of the neighborhood communities. Qn. establish the equilibrium of the consumers of the two goods

    		•
  • Q : Charging the competitive price in the

    An apparent monopoly might charge the competitive price in the long run when: (w) exit is costly. (x) entry and exit are relatively costless. (y) this is not a natural monopoly. (z) this is not regulated.

    Q : Describe the term trend projection

    Describe the term trend projection.

    		•
  • Q : Attributable worth cultivating The

    The theory which the economic rent on agricultural land depends upon how much extra production is gained relative to the production which could be realized on land not rather worth cultivating is attributable to: (1) Johann H. von Thünen. (2) Ada

    		•
  • Q : Problem of adverse selection Signaling

    Signaling may worsen the problem of adverse selection when: (w) potential agents do not transmit any types of signals. (x) job applicants increasingly signal with phony degrees. (y) employers discriminate on the basis of race or gender. (z) severe rec

    		•
  • Q : Determine the total Revenue from origin

    Refer to figure as sketched below. Why is the total revenue curve a ray from the origin: w) since revenue increases at an increasing rate. x) since revenue increases at a decreasing rate. y) since the firm can sell its product at a constant price. z) since the firm sh

    		•