Also, these costs are not directly attributable to production and this makes it vital that the company keeps these expenses under constant control. Calculations Break-even point Break-even point = Fixed costs / (Unit Selling Price -- Unit Variable Cost) Break-even point for the given data = 500,000 / (20-10) = 50,000 So, the firm has to sell 50,000 units at the current price levels to break-even. The break-even point in terms of dollars is

Managerial Accounting This scenario shows the importance of variable cost drivers in calculating a breakeven point and conducting effective CVP analysis. In this situation, the company is losing money no matter which scenario with respect to fixed costs is investigated, but there is a solution available for at least the lower fixed cost scenario: Total variable cost is: (50,000 * 80) + 400,000 = $4,400,000 The average variable cost is: $4,400,000 / 200,000

Margin is quite simple and states that a certain value of the production volume exists for which costs are accounted for, but profit is null. This critical production volume is calculated by applying the following formulae: The Variable Cost per Unit is calculated as Total Variable Cost per Current Volume. Therefore, aggregate revenue (Quantity (Volume) x Price per Unit (P)) shall be equal to the Variable Cost per Unit x

Managerial Accounting Accounting Managerial accounting is different from financial accounting because it is used primarily by companies and organization to generate weekly, daily and monthly reports to help them forecast future financial events (Birnberg, 1992). The profession of managerial accounting looks at the many ways managers can help facilitate increased revenues over defined times, and the future in general. It is not concerned with investments as much as it is concerned with

Managerial and Financial Accounting Case Managerial Accounting - Variable Costing Managerial accounting emphasizes short-term profit analysis, income statement important. Consequently, 'll examine discuss income statements case. Managerial and Financial Accounting Financial and managerial accounting basic difference comes on the uses. While, financial accounts are prepared for use by external parties, managerial accounts are prepared for use internally. The process of preparing the accounts in both financial and managerial accounting use similar source for

Managerial Accounting -- Budgeting: Differential Analysis This assignment considers variable costing as a decision-making tool for evaluating whether to accept an order to manufacture Product C, which is a product proposed by an existing customer for whom Lewis Company is manufacturing Product B. Two general methods for valuing inventory and for determining the cost of goods sold are absorption costing and variable costing. The data in this case study is presented