--%>
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 : Neoclassical economics One of my

    One of my friends can't find the answer of this question .Give me answer of this question. How are economic theories created in neoclassical economics?

    		•
  • Q : Aid for Dependent Children in Welfare

    The Aid for Dependent Children (AFDC), program has been condemned most for: (w) high crime rates among the poor. (x) the disintegration of low income family structures. (y) indifference to the plight of the less fortunate. (z) the bankruptcies of Clev

    		•
  • Q : Supply of good in competitive economy

    When the supply of a good shrinks in a competitive economy, there tends to be a raise in the: (1) Product price. (2) Incomes of producers. (3) Demand for resources. (4) Quantity supplied. Can someone please help me

    		•
  • Q : Law of Diminishing marginal utility

    Describe the Law of Diminishing marginal utility? Answer: Law of Diminishing marginal utility: As a consumer goes on consuming more and more units of a commodity th

    		•
  • Q : Total costs from maximizes profit If

    If this firm maximizes its profit as in given graph, then its total costs equal: (w) $75,000 per month. (x) $90,000 per month. (y) $15,000 per month. (z) $105,000 per month.

    Q : Attribute Demand Curve for Bonds A

    A demand curve for bonds moving to the right is probably to be attributable to: (w) a business cycle recession. (x) lower expected (future) interest rates. (y) an increase into the expected rate of inflation. (z) an increase in the liquidity of altern

    		•
  • Q : Pure economic profit in the short run

    Monopolistically competitive firms: (w) profit by erecting durable barriers to entry and exit. (x) may realize pure economic profit in the short run, but not in the long run. (y) supply homogenous goods. (z) produce where marginal cost is at its minim

    		•
  • Q : Key questions in evaluating a research

    Key questions in evaluating a research report: In brief, there are five key questions you, as a consumer of analytical work, should ask yourself as you are evaluating a research report. 1. What is the purpose of th

    		•
  • Q : Constant price elasticities in

    Perfectly inelastic demand curves include constant price elasticities equivalent to zero as well as: (i) cannot exist within the real world across the full range of possible prices. (ii) happen more often than any other type. (iii) are horizontal line

    		•
  • Q : Problem Regarding to Contestable Markets

    Even though the concentration ratio for an oligopoly is close to hundred, firms may operate rather efficiently when the market: (1) price conforms to a limit pricing model. (2) is contestable since entry and exit are easy. (3) demand curve is unitaril

    		•