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Survey of Accounting (Accounting I)

8th Edition
Carl Warren
ISBN: 9781305961883

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Survey of Accounting (Accounting I)

8th Edition
Carl Warren
ISBN: 9781305961883
Textbook Problem

Break-even analysis
Break-even analysis is one of the most fundamental tools for managing any kind of business unit. Consider the management of your school. In a group, brainstorm some applications of break-even analysis at your school. Identify three areas where break-even analysis might be used. For each area, identify' the revenues, variable costs, and fixed costs that would be used in the calculation.

To determine

Concept Introduction:

Break-even point is that level of sale on which the company does not have any profit or loss, i.e., that point at which company only recovers its cost and fixed cost.

The three areas for break-even analysis in a school and to classify it into revenue, variable cost and fixed cost.

Explanation

The three areas in the school in which the break-even point method can be used are selling of study material, service of teaching and transportation of students.

    ParticularsSelling of study materialService of teachingTransportation of students
    RevenueRevenue from selling the study material to the students of the schoolRevenue from the fees charged for the teaching by the schoolRevenue from students by charging them for using the bus for transportation to...

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