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Breakeven Analysis

Breakeven Analysis. Breakeven Analysis. Formula: Fixed Cost vs Variable Cost Approach Questionable Costs. Fixed Cost Approach. SP = $12 VC = $ 8 FC= $1000 QC= $200 Units = 350 0 = (SP – VC)X – FC – QC 0= ($12 - $8)X - $1000 - $200 0= $4X -$1200 4x = 1200 X = 300 units.

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Breakeven Analysis

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  1. Breakeven Analysis

  2. Breakeven Analysis • Formula: Fixed Cost vs Variable Cost Approach • Questionable Costs

  3. Fixed Cost Approach SP = $12 VC = $ 8 FC= $1000 QC= $200 Units = 350 0 = (SP – VC)X – FC – QC 0= ($12 - $8)X - $1000 - $200 0= $4X -$1200 4x = 1200 X = 300 units

  4. Variable Cost Approach • SP=$12 • VC=$ 8 • FC=$1000 • QC=$200 • Units= 350 0 = (SP – VC – QC/unit)X – FC 0 = ($12 - $8 - $200/350)X- $1000 0 = ($4 - $.57)X - $1000 $3.43X = $1000 X = 292 units

  5. Business Return • Desires minimum 10% on project

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