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Break-Even Analysis in Relation With Mathematics

Break-even analysis is used to determine the level of sales or production needed to cover total costs. It is calculated by dividing fixed costs by the selling price minus variable cost per unit. Break-even analysis can be used for new product launches, in competitive conditions, and for budgeting and forecasting. It focuses on long-term profitability by using linear equations from mathematics to model total revenue, total costs, and break-even points graphically. Analyzing the break-even point allows determining cost and profit functions to inform decisions.

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44 views10 pages

Break-Even Analysis in Relation With Mathematics

Break-even analysis is used to determine the level of sales or production needed to cover total costs. It is calculated by dividing fixed costs by the selling price minus variable cost per unit. Break-even analysis can be used for new product launches, in competitive conditions, and for budgeting and forecasting. It focuses on long-term profitability by using linear equations from mathematics to model total revenue, total costs, and break-even points graphically. Analyzing the break-even point allows determining cost and profit functions to inform decisions.

Uploaded by

moazali
Copyright
© Attribution Non-Commercial (BY-NC)
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PPT, PDF, TXT or read online on Scribd
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BREAK-EVEN ANALYSIS IN RELATION WITH MATHEMATICS

BREAK EVEN ANALYSIS


2

What is break even.


Formula of break even. Where we use it. Focus on Profitability. Link with mathematics. Graph analysis.

Findings & Decisions.

What is BreakEven Point


3

Break even is a No Loss No Gain Situation. Number of units that must be sold in order

to Produce zero profit. but cover all associated cost. Associated cost can be all variable & all fixed Cost.

FORMULA OF BREAK EVEN


4

Break Even Point =

Fixed Cost Selling price-Variable Cost

Uses Of Break Even.


5

New Product lounging. Tough Competition Conditions.

Helps in making budgets and estimates.

Focus on Profitability
6

The whole concept of break-even stands on

fore-seeing the long term profitability.

Link with Mathematics


7

By using linear equations, To determine cost profit revenues functions. To analyze breakeven points and equilibrium points.

Link with Mathematics


8

Total Revenue.
TR= Total Revenue TR = P Q Price Quantity

Total Cost. TC = T. Variable Cost + T. Fixed Cost. T .Vc = V. cost per unit T.Quantity Fixed Cost Is Always On Total.

Graph Analysis.
9

Findings & Decisions.


10

By using linear equations Of Mathematics , We can determine cost profit revenues functions. Analyze breakeven points and equilibrium points. Net profit before tax is determined by profit

function.

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