502 Words3 Pages

The Break-even chart
Knowing what the total expenses are and how to make a break-even chart is essential to good management. A correct break-even chart is valuable as a supplement to budget making pricing policies, decisions on sales policies, expense control and expansion plans, among other things. The completely competent entrepreneur should know what sales volume is necessary to break-even (the point where there is no profit or loss).
A break-even chart shows the relationship of fixed, variable, and total expenses to sales at all volumes of sales. It measures all expenses and income from sales on the vertical axis and the units sold or percentage of capacity on the horizontal axis. The vertical distance between the total expense line and the sales income line measures profits at any level of capacity or at any volume of sales.
An accurately drawn break-even chart can tell the entrepreneur what sales volume is necessary to reach the break-even point and the percentage of his capacity these sales volume represents. It tells him the profits to be derived from any planned expansion of sales. These relationships are measured against a presently existing set of facilities and expense analysis. Any change of store space, for example, would call for the creation of a new chart made for the expanded facilities and expenses.
Making a Break-Even Chart When Percentage of Capacity Is Unknown
The problem of determining at what percentage of capacity the firm operated has prevented many businessmen from making maximum use of a break-even chart. This problem can be easily resolved.
A factory operation, that has machines, which can produce 100 units of its products a day, can easily determine 100 percent of its capacity. It merly multiplies working days times 100 units to find what production will be if full production is maintained during the month or year. By then

Related

## Da Task 3 Essay

3148 Words | 13 Pagesthis data into POM for Windows gives the following results: There are two types of costs to consider, fixed and variable. Based upon the information given the relationship between cost and revenues are linear. In order to use the cost volume and breakeven analysis tool, variable costs must be constant. Here we have constant costs but different scenarios which qualify it to be used by this tool. Using this tool, I created inputs for reconditioning new equipment, buying new equipment, and outsourcing

## Jgt2 Task 3 Essay

3952 Words | 16 PagesThe two different cost types that need to be looked at are both the fixed costs and the variable costs. The data that was provided shows that the bond the cost of the business and the revenues coming in are in fact linear. The cost volume and breakeven analysis tool requires the costs that are variable to be

## Jgt2 Da 3 Essay

1644 Words | 7 Pagesused to determine best decisions in business operations. There are two types of costs to consider, fixed and variable. Based upon the information given the relationship between cost and revenues are linear. In order to use the cost volume and breakeven analysis tool, variable costs must be constant. Here we have constant costs but different scenarios which qualify it to be used by this tool. Using this tool, I created inputs for reconditioning new equipment, buying new equipment, and outsourcing

## Wgu Jgt2 Task 3 Essay

1127 Words | 5 Pagesrecondition the equipment or outsource production to a vendor. While both the reconditioning and outsourcing options require lower volumes of sneakers to breakeven, the graph on Appendix A shows that the purchase option has the lowest overall costs for manufacturing more than 300 sneakers. Reconditioning the equipment and outsourcing both cost less to breakeven, however costs for each of these options become more than the purchase option as more sneakers are produced. For example, if 600 sneakers were produced

## Wgu Jgt2 Decision Analysis Task 3

3748 Words | 15 PagesShuzworld Analysis: Output, Forecasts, Quality JGT2 Decision Analysis, Task 3 Introduction: Shuzworld is a national retailer based in Omaha, Nebraska that focuses on selling shoes, boots, and sandals. In addition, the company produces its own line of products that include work boots, sandals, rubber boots, and rainwear; along with sport and adventure footwear (MindEdge, 2014). The purpose of this report is to provide recommendations based on several analyses involving the company’s volume

## Cvp Analysis

3066 Words | 13 Pagesunit contribution margin, and explain how they may be useful to managers. 3. Using the unit contribution margin, determine the break-even point and the volume necessary to achieve a target profit. 4. Using a cost-volume-profit chart and a profit-volume chart, determine the break-even point and the volume necessary to achieve a target profit. 5.

## Rfm Analysis

978 Words | 4 Pagesa bar chart of Average $ ordered from last catalog by recency deciles show? (Hint: review the Using SPSS for Customer Database Analysis if you need help creating the deciles.) The bar chart shows the average dollar amount ordered for each recency decile. There is a strong relationship between average dollar amount and recency. The more recent (with 1 being the most recent) a customer purchases, the higher average dollar amount ordered is for that customer. 5. What does a bar chart of Average

## Decision Analysis - Jgt Task 4

1491 Words | 6 Pageswould have variable costs of $3,000 for every 1,000 sneakers. Below in the Breakeven Analysis you can see the breakdown of this information. Option 1, reconditioning our current equipment vs. buying new our breakeven point is 300 units and $350,000. Option 2 is reconditioning our current equipment vs. outsourcing. The breakeven point is 25 units and $75,000. Option 3 is buying new equipment vs. outsourcing and our breakeven point is 80 units and $240,000. My recommendation based on the facts given

## Blue Orb Essay

1801 Words | 8 PagesCritical Issues * How can BO smoothly transition from a research company to a software retail company * How to convert free users to paid users in order to generate revenue stream * How to capitalize on the gains as a Monopoly Situation Analysis Currently, BO is in a transition phase from a research company to a software retail company. With the lack of experience in the business industry, BO needs to obtain 10,000 paid subscribers in order to show that there is a market. In fact

## Zenith Dog Food Inc.Case Essay

2130 Words | 9 Pagescompany, it had been recommended that the wet dog food category be explored as the target market due to its most profitable potential area. Consecutively, it has been also noted that the Bil Jac pricing strategy gains an advantage within the breakeven point analysis, where we were able to see that it would only take 30-50% of the wet dog food market to compensate for the company’s variable cost, leaving nearly half of the market available for profitable capital gains exploitation. Most

### Da Task 3 Essay

3148 Words | 13 Pages### Jgt2 Task 3 Essay

3952 Words | 16 Pages### Jgt2 Da 3 Essay

1644 Words | 7 Pages### Wgu Jgt2 Task 3 Essay

1127 Words | 5 Pages### Wgu Jgt2 Decision Analysis Task 3

3748 Words | 15 Pages### Cvp Analysis

3066 Words | 13 Pages### Rfm Analysis

978 Words | 4 Pages### Decision Analysis - Jgt Task 4

1491 Words | 6 Pages### Blue Orb Essay

1801 Words | 8 Pages### Zenith Dog Food Inc.Case Essay

2130 Words | 9 Pages