COST ACCOUNTING
BREAK EVEN POINT
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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Variable costs-Fixed costs
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Variable costs + Fixed costs
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Selling price + Fixed costs
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Variable costs X Fixed costs
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Detailed explanation-1: -Take your total cost of production and subtract your variable costs multiplied by the number of units you produced. This will give you your total fixed cost. You can use this fixed cost formula to help. Let’s use a real-world example.
Detailed explanation-2: -The first method works by using this simple formula: Fixed cost = Total cost of production-(Variable cost per unit x number of units produced)
Detailed explanation-3: -Consequently, total cost is fixed cost (FC) plus variable cost (VC), or TC = FC + VC = Kr+Lw.
Detailed explanation-4: -Add all variable costs required to produce one unit together to get the total variable cost for one unit of production. Multiply the variable costs for one unit of product by the total number of units produced. The sum of this calculation will give you the total variable cost.