COST ACCOUNTING
COST VOLUME PROFIT ANALYSIS
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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Which is the correct formula for calculating breakeven
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Fixed Costs-Variable Costs
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Fixed Costs/Variable Costs
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Fixed Costs/(Selling Price-Variable Costs)
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Fixed Costs-(Selling Price + Variable Costs)
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Explanation:
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.
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