It is the sales level where company has no gain no loss.Break even is the Sales level where variable cost + fixed cost i.e Total cost equal to sales amount.Selling price for any volume remains constant.īy using marginal costing, decision on the determination of the breakeven point.Unit variable cost for any volume remains constant.Costs can be accurately classified as Fixed and variable.Sales = Variable cost + Fixed cost + profit = Contribution.įollowing are assumptions of cost volume profit Analysis:. ![]() Sales = Variable cost + Fixed cost + profit.He we can start on the assumption that there are only two types of cost : Yes, I have agree with the author statement, as for the cost volume profit analysis, assumption should be valid, otherwise it will provide inccurate results.
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