ACCT 1B Final: Acct_1B_Lecture_11
16 Jun 2020
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Cm technique at breakeven cm must equal total fixed costs. Breakeven units = fc cm per unit ,000 / = 1000 units. Graphic presentation another way to see breakeven is to graph. This graph this graph includes costs, volume, profits = cvp graph. ,000 / . 40 = ,000: plot total revenue starting at 0. Every time sell unit = more so is upwardly diagonal: plot fixed costs, tc start at fc line and every unit produced add vc = . Vc = difference between tc line and fc line: determine breakeven where total cost line and total revenue line intersect. Breakeven in $ ; draw line from breakeven point to vertical axis. The higher the $ or %, the greater the margin of safety. Can analyze the margin in terms of competitive pressures, downturns in economy: determine the sales required to earn a target net income and determine margin of.
