--%>
Assignment Help - homework help

Uses for break-even analysis

Explain what are the several uses for break-even analysis?

E

Expert

Verified

These type of analysis allows the firm to define at what level of operations it will break even (earn zero profit) and to discover the relationship between costs, profits and volume. It provide helps to the management at current costs of products so many numbers of units must be sold to get the cost of producing the product.

For Example: On producing a product if you spend $200 and its selling price is $20 then to recover the cost of product you must sale 10 units.

It helps the management to determine how much of units to be sold to get desired profit on product such as: if in the above example you want to earn $20 profit then add it to it's cost of $200 and it will become $220 now you need to earn profit of this $20 you need to sale 11 items of product.

   Related Questions in Microeconomics

  • Q : Occurrence of lower bond prices Lower

    Lower bond prices arise simultaneously while there are increases into: (1) optimism among investors in economic capital. (2) government budget surpluses. (3) the rates of saving by households. (4) the liquidity of all financial assets. (5) interest ra

    		•
  • Q : Profit maximizing strategy Prohibition

    Prohibition Corporation would exactly break-even on its St. Valentine’s Day software when, in place of correctly identifying its profit maximizing strategy, this: (1) operated at point i, charging just $20 per copy and producing

    		•
  • Q : Quantity demanded grows with price cut

    A price elasticity of demand coefficient of 2.5 approximately implies that: (1) quantity demanded rises 1 percent while price rises 2.5 percent. (2) quantity demanded grows 2.5 percent along with a 1 percent price cut. (3) price rises 2.5 percent whil

    		•
  • Q : Advantage of law of equivalent marginal

    Behavior most compatible along with the law of equivalent marginal advantage occurs while: (w) shoppers exhaust their budgets upon nondurables and services. (x) every firm uses similar markup over cost to set prices. (y) identical twins work in evenly

    		•
  • Q : Outsourcing affect the economy Explain

    Explain how does outsourcing affect the economy?

    		•
  • Q : Maximize profit by marginal revenue and

    Prohibition Corporation’s very famous St. Valentine’s Day software is going within version 6. The very first point Prohibition requires to classify in its quest to maximize profit is the: (1) point e. (2) point f. (3) point g. (4) point h.

    		•
  • Q : Total revenue for profit-maximizing

    TR (total revenue) for this profit-maximizing pure competitor equivalents area: (i) 0PeQ. (ii) bPec. (iii) aPed. (iv) 0bcQ. (v) 0Pec.

    Q : Minimum Required Quantity Demand An

    An economic rent is earned when the owner of any resource as: (w) receives income greater than the minimum required to ensure that the quantity demanded is obtainable. (x) exerts control over the payment for the resource. (y) sells input services in a

    		•
  • Q : Determine total costs by

    Hey guys I need your idea for this query regarding the total costs as illustrated graph that this profit-maximizing pure competitor’s total cost (TC) equals area as: (w) 0Phq2. (x) 0bgq2. (y) 0aeq1. (z) daef.

    Q : Problem on monetary prices In adding up

    In adding up to monetary prices, the costs of buying and selling comprise: (1) Wage payments. (2) Monopoly gains. (3) Social advantages. (4) Transaction costs. (5) Pecuniary externalities. Please someone suggest me

    		•