Break-Even Analysis.pptm

Break-Even Analysis.pptm

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Break-Even Analysis To evaluate the implications of heavy fixed asset use, determine the level that the firm break even and how much will changes in volume affect cost and profit.
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Break-Even Analysis Leveraged Firm A product from a bakery store of ABC Company Price: 30.000 dong per unit Fixed costs: 25.000.000 dong Variable costs: 20.000 dong per unit Unit sold Total Variable Costs Fixed Costs Total Costs Total Revenue Operating Income (Loss) 0 0 25.000.000 25.000.000 0 (25.000.000) 500 10.000.000 25.000.000 35.000.000 15.000.000 (20.000.000) 1000 20.000.000 25.000.000 45.000.000 30.000.000 (15.000.000) 1500 30.000.000 25.000.000 55.000.000 45.000.000 (10.000.000) 2000 40.000.000 25.000.000 65.000.000 60.000.000 (5.000.000) 2500 50.000.000 25.000.000 75.000.000 75.000.000 0 3000 60.000.000 25.000.000 85.000.000 90.000.000 5.000.000 3500 70.000.000 25.000.000 95.000.000 105.000.000 10.000.000 ABC Company needs to sell 2.500 products to reach break-even point.
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Break-Even Analysis Conservative Firm Not all the firms choose to operate at the high degree of operating leverage. A product of Bibica Company Price: 30.000 dong per unit Fixed costs: 10.000.000 dong Variable costs: 25.000 dong per unit Unit sold Total Variable Costs Fixed Costs Total Costs Total Revenue Operating Income (Loss) 0 0 10.000.000 10.000.000 0 (10.000.000)
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