Break Even Analysis Case Study Pdf
This is called the Break Even Point Break Even Point = Fixed Costs Unit Contribution Margin € 600 € 1.50= 400 Units Therefore 400 bunches of flowers must be sold to Break Even –at this the point the business is not making a Profit nor incurring a Loss –it is merely covering its Total Costs SP = € 2.00 VC = € 0.50 UCM= € 1.50 FC.
The break-even point (BEP) in economics, business—and specifically cost accounting—is the point at which total cost and total revenue are equal, i.e. "even". There is no net loss or gain, and one has "broken even", though opportunity costs have been paid and capital has received the risk-adjusted, expected return. In short, all costs that must be paid are paid, and there is neither profit or loss.
their service to management. When requested to make a study of the general health of a company, the firm lists a break-even analysis as one of seven steps in its procedure, the other items including studies of company balance sheets and profit-and-loss statements, calculation of financial ra-tios, an analysis of product profitability, a summary of
Objectives To enable learners to understand concept of Break Even Analysis and its application in decision making process. Keywords Break Even Point, P/V Ratio, Fixed cost, Variable Cost and Margin of safety QUADRANT-I Module 15: Break Even Analysis 1. Break Even Analysis 2. Break Even Point 3. Assumptions of Break-Even Analysis 4.