--%>
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 : Demand for labor in purely competitive

    When the hourly wage rate for workers this purely competitive firm hires is approximately of $13, this will operate at: (1) point a. (2) point b. (3) point c. (4) point d. (5) point e.

    Q : Most exceed the wages or specific

    Firms tend to offer wages which most greatly exceed the wages which workers would earn elsewhere to workers who have: (1) profit-sharing plans. (2) specific training. (3) prenuptial agreements. (4) non-compete clauses in their work contracts. (5) general training.

    		•
  • Q : Explain the aspects of operational or

    Explain the aspects of operational or internal issues.

    		•
  • Q : Most wage elastic at prevailing wages

    Demand is probable to be most wage elastic at prevailing wages for: (1) carpenters. (2) neurosurgeons. (3) computer programmers. (4) teenage employees of fast food restaurants. (5) economists. Can someone explain/h

    		•
  • Q : Demad elacticty demand function is: QY

    demand function is: QY = -8,000 - 5,000PY + 192A + 120I + 2,000PX (6,000) (1,000) (120) (80) (800) R2 = 91% Here QY is quantity (measured in units) of Product Y demanded in the current period, A is hundreds of dollars of advertising ($00), I is thousands of dollars of disposable income per ca

    		•
  • Q : Explain the cost concepts briefly

    Explain the cost concepts briefly.

    		•
  • Q : Differences between Sunk Cost and

    Illustrates the differences between Sunk Cost and Incremental cost?

    		•
  • Q : Least wage elastic demand for labor For

    For labor Plastibristle’s demand for labor is least wage elastic at: (i) point a. (ii) point b. (iii) point c. (iv) point d.

    Q : Persuade competitors by cartel member

    When a cartel member can persuade competitors to keep the cartel price but secretly give a discount price to certain customers, profits will rise: (w) for all members of the cartel. (x) since price cuts are only given to assigned customers. (y) as a result of an incre

    		•
  • Q : Define consumer psychology and pricing

    Define the consumer psychology and pricing and affecting elements.

    		•