COST ACCOUNTING
BREAK EVEN POINT
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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fixed costs + contribution per unit
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fixed costs-contribution per unit
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fixed costs x contribution per unit
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fixed costs / contribution per unit
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Detailed explanation-1: -To calculate the break-even point in units use the formula: Break-Even point (units) = Fixed Costs ÷ (Sales price per unit – Variable costs per unit) or in sales dollars using the formula: Break-Even point (sales dollars) = Fixed Costs ÷ Contribution Margin.
Detailed explanation-2: -Break-even Sales = Total Fixed Costs / (Contribution Margin) Contribution Margin = 1-(Variable Costs / Revenues)
Detailed explanation-3: -Contribution margin per unit formula would be = (Selling price per unit – Variable cost per unit.
Detailed explanation-4: -Contribution per unit = selling price per unit less variable costs per unit. Total contribution can also be calculated as: Contribution per unit x number of units sold.
Detailed explanation-5: -2) Profit Volume Ratio or P/V Ratio – It is the measurement of the rate of change of profit due to change in volume of sales. Sales • Fixed Cost (₹) where, B.E.P(₹) =B.E.P (u) x Sales( p. u. ) Calculation of M.O.S-M.O.S.= Actual Sales – B.E.P. Sales = 100000-60000= ₹40, 0000 OR M.O.S.