Breakeven Analysis Assignment Help

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The calculation and examination of the margin of safety for an entity based on collected revenues and associated costs are entailed by breakeven analysis. An entity uses breakeven analysis to determine what level of sales are used to fix the total fixed costs by analyzing different price levels relating to various levels of demand. A greater insight regarding selling capabilities would be given to a seller by demand side analysis. Breakeven analysis is used in determining the level of production or targeted desired sales mix. The breakeven analysis should be used by management team as the calculation and the metric should not be disclosed to external sources investors, financial institutions or regulators. Breakeven analysis considers the level of fixed costs related to the profit produced by each additional unit produced or sold. Generally, a company with less fixed costs has a low breakeven point of scale. Breakeven Analysis is explained in a detailed way in Breakeven Analysis Assignment Help Online Service.

 

CONCEPT OF BREAKEVEN ANALYSIS:-

 

Basically the breakeven analysis lies in the concept of contribution margin of a product. In between the selling price of the good and total variable costs the contribution margin is excess. We do not consider the fixed costs in calculating the contribution margin. For example, suppose the product sells for $200, total costs are $50 per product and total variable costs are $120 per product, the product will have a contribution margin of the product is $80 ($200 – $120). This $80 will reflect the amount of revenue collected to cover fixed costs and is retained as net profit. Contribution margin is used in making pricing decision by managements. Negative or low contribution margin indicates less or no profit in the business segment.

 

The benefits of breakeven analysis are given in details in Breakeven Analysis Assignment Help Online Service

 

• It ensures the viability of a business, investments, projects, etc.
• It is most helpful in partial budgeting or capital budgeting.
• It is used in recognition of relevance of fixed and variable cost.
• It gives the indication of lowest amount of business activity used to prevent losses.
• The relationship shared between cost, production volume and returns can be seen.
 

LIMITATIONS:-

There are certain limitations in breakeven analysis which is given by Breakeven Analysis Assignment Help Online Service
• It is difficult to classify the cost due to all variables or all fixed.
• It suits to the analysis of one product at a time.
• It may be used even after the change of cost and income functions.
• Its applicability can be affected by numerous assumptions.
 

Features of Breakeven Analysis Assignment Help Online Service are:-

 

Clients looking for Breakeven Analysis Assignment Help Online Service from us can expect a few pros and traits:-
 

• Proper tools and notes configured to study break even analysis.
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