1.
Break-even Point: It refers to a point in the level of operations at which a company experiences its revenues generated is equal to its costs incurred. Thus, when a company reaches at its break-even point, it reports neither an income nor a loss from operations. The formula to calculate the break-even point in sales units is as follows:
To compute: the anticipated break-even sales (units).
2.
the amount of sales (units) if the company desires a target profit of $240,000.
3.
To construct: a cost-volume-profit chart assuming the sales of 20,000 units within the relevant range.
4.
the probable income (loss) from operations if sales total 16,000 units.
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Financial & Managerial Accounting
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