Break Even Analysis Homework Help
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What is break even analysis?
A margin of safety is usually recognized by breakeven analysis by taking into consideration the revenues collected and cost associated in a business. In a pictorial graph, the area above the breakeven point is said to be the area of profit. In this article for Break even analysis homework help we discuss the reasons for un-popularity of this method along with its other aspects.
The contribution margin plays an important role in the concept of break even analysis. The excess found out in between the selling price of the product and total variable cost of the products provides the contribution margin. The management does not disclose the breakeven results to other entities like investors and regulators. The level of the fixed costs is accounted and is related to the profit earned by each extra unit produces and sold, as per our Break even analysis homework help experts.
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Reasons for not using break even analysis in general
There are certain reasons that prohibit the managers from using this method. They are compiled by our Break even analysis homework help article writers and presented below.
1. It is generally confused with the period of payback. It is thought of the time that will take to recover the investment done in the business.
2. The concept of fixed cost is usually not absorbed and break even analysis is based on that concept.
3. The per unit variable cost and per unit revenue cost is averaged down and the break even analysis is found.
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