FIN 200 RE: Break Even Analysis A. What is the break-even point in bags? Formula: FC/P – VC $80‚000/$10-5 (0.10 x 50 lbs = $5.00) $80‚000/$5 Break-Even Point would be $16‚000 B. Calculate the profit or loss on 12‚000 bags and on 25‚000 bags 12‚000 bags 12‚000 x $10 = 120‚000 80‚000/$5 x 12‚000 = $80‚000 + $60‚000 = $140‚000 120‚000 – 140‚000 = -20‚000 loss 25‚000 bags 25‚000 x $10 = 250‚000 80‚000/$5 x 25‚000= 80‚000 + 125‚000 = 205‚000 250‚000 – 205‚000 = 45‚000
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per patient per day = $300 x 0.333 = $100 Break Even Analysis for Question a To calculate the minimum number of patient-days for pediatrics to break even‚ for the year ending June 30‚ 2012‚ we know that no additional beds will be rented. We also know that patient demand is unknown and that other factors remain the same as for the year ending in June 30‚ 2011. Based on what we know so far‚ we use the pX = a + bX formula to get the break-even point‚ in which X = Minimum Number of Patient-Days
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Definition of Break Even point: Break even point is the level of sales at which profit is zero. According to this definition‚ at break even point sales are equal to fixed cost plus variable cost. This concept is further explained by the the following equation: [Break even sales = fixed cost + variable cost] The break even point can be calculated using either the equation method or contribution margin method. These two methods are equivalent. Equation Method: The equation method centers on
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Calculating the break-even point To avoid making a loss every business must at least break-even by achieving a level of sales that covers its total costs. But what level of sales is necessary to break-even? To explore the concept of break-even‚ we need to define some basic terms: Fixed costs: Costs that do not vary with output or sales e.g. managers salaries‚ rent and rates on business premises. Variable costs: Costs that vary with the quantity produced or sold e.g. costs of materials
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and break up the monopoly of the 747‚ but it didn’t have a product to compete with Boeing’s 747. Compared to the 747‚ the A3XX provides more advantageous features which would attract passengers especially on the longer routes‚ such as more space per seat‚ four-engine plane‚ etc. The combination of increased capacity and reduced costs would provide superior economics. Airbus felt confident that capacity increases would eventually prevail. As we stated above‚ Airbus’s objectives are to break up the
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prefer to use? b) Break-Even Analysis – Systems of Equations Application Problem Suppose a company produces and sells pizzas as its product. Its revenue is the money generates by selling x number of pizzas. Its cost is the cost of producing x number of pizzas. Revenue Function: R(x) = selling price per pizza(x) Cost Function: C(x) = fixed cost + cost per unit produced(x) The point of intersection on a graph of each function is called the break-even point. We can also find the break-even point using the
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Break-even Analysis Grace L. Harden University of Phoenix January 30‚ 2011 Break-even Analysis Getwell Clinic on Beach Street concentrates care and treatment of three different types of patients listed as DRG-M‚ DRG-J‚ and DRG-P. Dr. Barkley is the new director of the satellite office and has requested that statistical break-even points be completed for each DRG. He would also like information on which DRG is the most profitable to promote in the growing practice. Diagnosis-Related
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The company should be confident that this is possible at present and in the future. Limitation of breakeven analysis 1. Breakeven analysis can be used for the company which produce only single product. 2. Breakeven analysis is valid within short period of time. Because any of the elements change. It would lead to the change of breakeven point. 3. When we use breakeven analysis‚ we assume that total fixed cost keep the same within the related range. But in the fact‚ the output exceed the relevant
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CVP and Break-Even Analysis ACC/561 - Accounting Wk 5 August 29‚ 2011 Snap Fitness Snap Fitness‚ a fitness business based in Minnesota‚ offers franchise opportunities. The opportunity comes with a start-up fee ranging from $60‚000 to $184‚000. The following items are included in the start-up fee: 1. Franchise Fee 2. Grand Opening Marketing 3. Leasehold Improvements 4. Utility and Rent Deposits 5. Training Many people dream of owning a business as opposed to working for
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Word document. 1. You want to use break-even and target profit analysis with respect to the introduction of a new product in the marketplace. Your manager says you are wasting your time because the best determination of profitability is the income statement after this product has been introduced. Explain why your manager is wrong. In order to fully understand the process of profitability within a business‚ we must understand what break-even and target profit analysis represent and the function that
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