Exercise A
Sales price
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$ XX
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Variable XXXXX
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$ (12)
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Contribution XXXXXX ($ XXX XXXX)
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$ 16
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Fixed XXXXX
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$ 100,XXX
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Break-XXXX XXXXX ($XXX,XXX/$16 per XXXX)
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XXXX
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The XXXXXXX XXXXXX produce XXX XXXXX,XXX XXXXX to XXXXX-XXXX. XXXX is XXX XXXXX at which fixed costs XXXX XX XXXXX XX contribution margin and thus, Barney XX., will incur zero operating income/loss.
Exercise B
XXXX XX meant by the term break-XXXX XXXXX?
XXXXX-even XXXXX XX a XXXXX XX sales which results in a XXXX operating income/XXXX to XXX company. XX is a XXXXX at XXXXX fixed XXXXX are equal to contribution XXXXXX. Break-even analysis attempt to XXXXX XXX XXXXXXX XX XXXXXXX inXXXXXX XX XXXXXXX’s financial XXXXXXX. XXXXXXX, it is based XX XXXXXXX assumptions including;
XXXXX costs do XXX change.
In reality however, it XX XXXXXX XXX case. Nevertheless, XXXXXXXXXXXXX XXXXXXXXXX XXX XXXXX-XXXX analysis XX help XXXX XXXXXXXXXX scheduling, XXXX management, XXXXXXX XXX XXXXX XXXXX-term XXXXXXXXX.
What are XXX XXXX in XXXXX the break-XXXX point XXX be XXXXXXXXX?
XXXXX-XXXX point XXX be expressed in two (02) main XXXX XX follows;
In terms XX the number XX units soldXX terms XX XXXXXXXX dollar value
What XX the XXXXXXXX range?
Relevant range is a maximum XXXXX XX XXXXXXXXXX XXXXX XXXXXX which fixed costs XXXXXX XXXXXXXX. Beyond this level, the behavior XX costs XX XXXXXX to XXXXXX. XXX XXXXXXX, consider a XXXXXXX XXXXXX XXXXXXX production XXXXXXXX of XX,XXX XXXXX per XXX XXX requiring a XXX-XX cost XX $1,XXX XXX XXX. No XXXXXX XX XXXXXXX produces 1,XXX XX XX,XXX units, it will have XX XXXXX $1,000 XXX-up costs. Thus, the XXXXX XX 10,XXX XXXXX XXXXX be XXXXXXXXXX XX a XXXXXXXX XXXXX XXX XXX purpose of XXX-up costs.
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