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The Key to Finding Break Even Analysis Homework Answers

by Jun 15, 2017Accounting

Break-even analysis is one of the important topics of economics, costing or business studies. The analysis helps you in determining the expenses you need to manage to surpass the break-even point for gaining profits. Hence, it deals with managing your break-even point. The break-even value is variable which depends on the individual business.

The break-even point is the point at which the total costs including sales and profit is equal to the loss. Therefore, to analyze how to manage your cost revenues for covering up your business expenses, you need to know about the break-even analysis. With break even analysis homework answers you can get a clear idea!

The break-even point is a familiar concept, and the ones who all are in the business field can use it. It is not only for the financial experts. Anyone can use it including managers, marketers, accountants and even entrepreneurs. It allows you to identify the outputs so that you can figure out the steps to meet those needs.

Determining Break-Even Point

As the break-even value is non-generic, it causes the difference in break-even point. Depending on your business, it may have a higher or lower value accordingly. Therefore, you need to keep a record on the calculated break-even point to manage your variable costs. For determining it, you can consider the following factors.

  • Per-Unit Sales Price

The price you receive after your per-unit of sales is known as a per-unit selling price. Hence, you need to calculate the cost of the sales discount and special offers. Also, check out for direct costs. These costs include the cost of creating a product or service. Sum these up for determining the average per-unit sales price.

  • Per-Unit Cost

The next thing is to identify the average per-unit costs. These costs include the amount you paid on average for reselling a product. It means once your buy a product, you have to pay for it and the amount you paid on average is called the per-unit cost. A glimpse through break even analysis homework answers will give you a better idea.

For determining it, you can use the units-based sales forecast table. However, it is only applicable to the manufacturing and mixed businesses. For businesses such as retail, distribution or sales, you can use the primary type of forecast table.

  • Contribution Margin

To calculate the contribution margin, you first need to know the selling price and direct costs. Once you have determined them, you are ready to calculate the margin.

The contribution margin is the cost you receive after surpassing all the direct costs you have received for each unit. It contributes to the overhead costs you get from each sale for the services. For example,you are selling a good for a certain price, and your direct costs add upto some unit. Then, you can find the contribution margin which is the amount left after deducting the direct costs from the selling price. You can check out break even analysis homework answers for details.

  • Overhead Costs

The overhead costs are the other expenses that you experience in your business. For example, costs such as insurance, rent, advertisement, labor, dues, taxes, etc. Hence, to earn a profit, you need to figure out these costs as well as your direct costs so that you can determine the amount of money needed for running your business.

Finding Help Online

The above was a short and overall description of break-even analysis. As this is a broad concept, it will take some time for understanding it. However, it is one of the topics many students find hard to deal. When it comes to assignment or task submission, it adds more to their hardship. Though, it is not a problem now. You can always find help online via break even analysis homework answers.

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