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Break Even Point Assignment Help

Home Break Even Point Assignment Help

The Outstanding Help for Break Even Point Assignment Help

Break-even Point, from a business point of view, is quite important term or concept. A break-even point is an ideal position where businesses want to reach so as to establish their various dynamics, in order to understand the profitability or sustainability of the business.

Many students associated with the fields of accounts, finance, etc. are familiar with this concept of break-even point. Though it is a simple concept, however, when applied to complex problem or situation, the same concept may appear to be a bit challenging and this is what many students face while dealing with a Break-even point assignment.

Therefore, keeping in consideration, the hardships faced by the students in handling complicated assignments like these, My Assignment Help Au brings the exemplary Break-even Point assignment help to you.

Break-even point, in the simplest of terms, can be explained as that point where the total costs, incurred by the firm, matches up to the total revenue of the firm. Now, the question that emerges is – what purpose does this method or point serves? Well, break-even point helps the firms, in numerous crucial ways to make their businesses more profitable.

Therefore, to given the students a brief about the relevance or importance of a break-even point in a business, we bring to you a list of its some important contributions:

  • As we by now have established that a break-even point has something to with the expenses and revenues of a firm, therefore the first benefit that we will talk about a break-even point will be regarding these aspects only. Thus a break-even point helps the firm in analyzing whether its cost of production or manufacturing is too high or low with respect to the revenue coming in. And thus this aspect helps the firm to reach the ideal costs that it must incur and thus helps to establish the correct price to a commodity or service. Hence a break-even point analysis helps in making the firm sustainable, along with keeping it profitable.
  • Also, a comprehensive break-even point analysis helps the decisions makers or the managers of the firm to anticipate the demands of the concerned product in the future and thus helps them in taking the right measures to positively influence the sales.
  • Another crucial benefit that a break-even point analysis brings in is to understand the relevance of the costs incurred by the firm in the manufacturing of a product. There are two aspects of the costs attached – one is the fixed cost (costs incurred on labour, interest, etc.), and the second is the variable cost (any unprecedented expenditure bore by the firm like wear and tear, depreciation, etc.) and the analysis of these aspects help the firm to stabilize the costs and thus makes the firm more sustainable.

Hence a brief understanding about the various important ways in which a break-even point analysis helps the businesses will help one to cater to the assignment in a more comprehensive manner. However, many students still find the task of accomplishing an assignment as tedious and thus seek the adept professional help. And therefore Myassignmenthelpau brings the perfect break-even point assignment help that you have been looking for.

Understanding the Important Concepts Related to Break Even Point Analysis:

Accomplishing any assignment successfully is a culmination of one’s knowledge and the skills to rightly present the information in an appealing manner. However, to rightly address all the crucial issues in the given task, it is equally important for a student to gain the fundamental understanding about the crucial aspects of the given topic. Similarly, as we are dealing with a break-even point assignment, it becomes imperative for the students to gain complete competence in some of the most essential aspects of the subject matter, and in order to help our students, we bring some of the most crucial aspects associated with the topic of break-even point.

To understand the functioning of Break-even Point better, let us dive in to the mathematical aspect of the concept:

            Break-Even Point (Sales) = Fixed Cost ÷ Contribution Margin

            Contribution Margin = Price of Commodity – Variable Cost

Now, to understand these equations in a comprehensive manner, or to use them efficiently, one must be aware about the fundamentals on which these individual terms are based up on:

  • The Concept of Fixed Costs: Fixed cost plays a rather influential role in the dynamics of the working of an organization. The aspect of fixed costs plays a crucial role in the analysis of break-even point, and thus we will see why this aspect holds this importance. Fixed costs are those expenditures incurred by the company which are already known and could not fluctuate with external stimuli, like – the labour cost, interests, loan on capital debt, etc. and this dimension helps the firm in deciding the pricing for the respective commodity.
  • The Concept of Contribution Margin: Contribution margin is also an essential component of break-even point analysis. Contribution margin can be induced by deducting the variable cost from the selling price of an item. For instance, if a commodity is being sold at $20, and its fixed cost is $5, then the contribution margin comes up to be $15. Then this $15 could be used to incur the variable cost and the money left after all the expenses is the net profit for the firm. Thus contribution margin helps the firm to analyse its revenues beforehand.
  • The Concept of Contribution Margin Ratio: This aspect being a ratio is expressed in terms of percentage points. Thus the contribution margin ratio is induced after deducting fixed cost from the contribution margin. And this aspect provides the entire picture to the organization’s manager to take the necessary measure to meet the break-even point. Hence this ratio helps the company to make the required decisions like setting the labour cost, or cost cutting the unnecessary expenditures, etc.

Explaining the Break-Even Point in a Graphical Manner:

The break-even point concept could also be explained or understood in the graphical manner. This could be described when the expenditure curve meets the revenue curve and the meeting point of both these curves gives us the break-even point. For your better understanding, refer to the following graphical representation:

Picture Courtesy: ReadyRatios.com 

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