CPA service Environment and also Concepts (BEC) aid » to work Management: Budgeting » Breakeven Formula
Explanation:

Breakeven analysis assumes that all variable costs and revenues are consistent on a per-unit basis and are direct over a pertinent range. Fixed expenses in full are constant.

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ABC company"s breakeven point was $780,000. Variable expenses averaged 60% the sales, and also the margin of safety and security was $130,000. What to be ABC"s donation margin?


Explanation:

The margin of safety and security is the overabundance of sales over break-even sales. Suspect variable expenses are 60% of marketing price, contribution margin might be computed in ~ 40% of offering price together 40% * $780,000 + 40% * $130,000.


A company has complete sales of $80,000, full variable prices of $20,000, and total fixed costs of $30,000. What is the breakeven level in sales dollars?


Explanation:

The donation margin is sales minus variable expenses (80,000-20,000) = 60,000. Then, 60,000/80,000=75%. Then, breakeven is total fixed prices of $30,000/75%=$40,000.


A product has actually sales that $200,000, a contribution margin the 20%, and a margin of safety of $80,000. What is the product"s solved cost?


Explanation:

The margin of safety and security is typically expressed together either dollars or a percentage and is the overfill of sales over breakeven sales.


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