What is Break Even Analysis

[Logan.B]

I am a MBA student, currently pursuing in final year. In this year we are having three project works regarding HR and finance, the first project is on the next month where my HOD is select topic for the project which is BREAK EVEN ANALYSIS, though we have a team of 2 members, but the problem is both of us having no such information about this topic, so I am here to collect some of the information about this topic. If anyone having any information or note of this topic please provide us, we will be very much thankful to you. Thanks in advance..

[Mr. Boo Bear]

I have a very little information about this topic, which is termed as; this is process of analysis which is used by production management and management accountants. It performs on the basis of categorizing production costs within the variables (if the cost change the output of production will also change) and with the “fixed"(here cost of the product is directly connected with the amount of production). The total variable and fixed costs both are differentiate with the sales revenue, which is used to determine the status of sales volume. According to the sales value or amount of production is might be results to neither profit nor the loss of the production.

[robodude]

The Break Even Analysis can describes with the simple diagram, which is in the form of chart for the monitoring the production status of the organization, this is definitely depends on the value of revenue, that the organization earning. This chart consists of the information of sales along with the revenue of the company. It is also defined as; the break-even chart is a graphical representation of the cost and the sales of a firm in different level. This chart is also shows the variation of gain, depends on the activities regarding the terms which are used in the sales and for gaining money. In a single word it is defined as, it is the point where neither the profit nor the loss is performs of any company. While the variable cost of a company increases the total costs (fixed + variable) will also be increases, as the output. But while the level of the out will fall then the cost of the company will be greater than the revenue.

[Mario2]

There are some of the other parts of “Break Even Analysis”, those are named as Variable cost and Semi variable cost. Under the variable cost there are also some parts like Direct, Indirect variable costs. The variable cost is defined as the, this is the cost which is directly connected with the level of output. Which is used to represent the output of the payment which is relates with the input, the different out puts are like raw material, labour, cost in the other expanses like fuel, commission to the workers. The concept of direct variable cost is defined as, here the production of the company will be terminate directly with direct use of attributable to the production for the particular product or the service. The raw materials and the wages those are used in the production of good material. In the indirect variable this is not directly attributed with the material those are use in the production. Here we can calculate the machine hours, cost of maintenance and certain cost which is made for the labour.

[SaleemJI]

In the Semi-variable cost the, it is the distinction of fixed and variable costs, this is used for the convenient way to categorize the cost which are made for the production. But regarding the cost of production there are some of the cost are made by nature , the investor cannot avoid them, which is can be gain till the company reach in certain level. These are largely depends on the overall "scale" of the production, also with the complexity of the business tactics. Suppose while any company reached in the low level this is not require associating costing for the human resource and for fully resourced finance department. And while the number people employed, output, number and complexity of transactions will reaches in the high level then this will definitely require for the investment into these fields.

[Milton.J]

Regarding the costing there are so many types of costing method which are used for preparing the breakeven analysis. I have some of the information about two of them and would lie to share the information’s about them with you. One of them is called as Fixed cost, which is use for calculating the items that you sell regarding the costing for them. Some of the assets which are considered as the Fixed cost are as rent, insurance and computers and the start-up costs for any purpose. And the other one is known as the Variable cost, you already have some of the information about this costing methodology, so there is no need to explain again about this term. One thing is that it is the method by which the company will determine the recurring cost of the product per unit wise.