Break even point in unit sales:
Break even point is that point of sale units which is required to cover the total costs. Total costs consisting of both fixed and variable costs to the company. BEP is a no
Requirement-1:
The company’s Break-even point in unit sales.
IF BEP unit is below or above the actual unit sales
Break even sales units are above the actual sale units in absorption costing method.
Explanations:
Given:
Actual unit sales is 35,000 units
BEP sales unit is 36,000 units
Formula used:
Actual sales unit- BEP sales units
Calculations:
35,000 units < 36,000 units
Conclusion:
Thus, Break even unit sales is more than the actual sales, in absorption costing method.
Requirement-3:
Comparing the break-even point in unit sales with that of net operating income under absorption costing.
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Introduction To Managerial Accounting
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