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    Breakeven Exercise

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    ssregens82
    If both the variable cost per unit and price per unit are increased by the same amount, the breakeven quantity and breakeven ratio will remain the same. However, the numerical values of the breakeven quantity and breakeven ratio will change. Specifically, if costs and price both increase by $x, the new breakeven quantity will be lower than the original by $x/unit, and the new breakeven ratio will also be lower than the original by the same amount.

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    Breakeven Exercise

    Uploaded by

    ssregens82
    12 views1 page
    If both the variable cost per unit and price per unit are increased by the same amount, the breakeven quantity and breakeven ratio will remain the same. However, the numerical values of the breakeven quantity and breakeven ratio will change. Specifically, if costs and price both increase by $x, the new breakeven quantity will be lower than the original by $x/unit, and the new breakeven ratio will also be lower than the original by the same amount.

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    cost accounting

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    If both the variable cost per unit and price per unit are increased by the same amount, the breakeven quantity and breakeven ratio will remain the same. However, the numerical values of the breakeven quantity and breakeven ratio will change. Specifically, if costs and price both increase by $x, the new breakeven quantity will be lower than the original by $x/unit, and the new breakeven ratio will also be lower than the original by the same amount.

    Copyright:

    Attribution Non-Commercial (BY-NC)
    Download as XLS, PDF, TXT or read online from Scribd
    Download as xls, pdf, or txt
    12 views1 page

    Breakeven Exercise

    Uploaded by

    ssregens82
    If both the variable cost per unit and price per unit are increased by the same amount, the breakeven quantity and breakeven ratio will remain the same. However, the numerical values of the breakeven quantity and breakeven ratio will change. Specifically, if costs and price both increase by $x, the new breakeven quantity will be lower than the original by $x/unit, and the new breakeven ratio will also be lower than the original by the same amount.

    Copyright:

    Attribution Non-Commercial (BY-NC)
    Download as XLS, PDF, TXT or read online from Scribd
    Download as xls, pdf, or txt
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    AMIS 525 p Q v F

    Breakeven Exercise price quantity variable cost per unit total fixed cost

    what is the impact on the breakeven point if both variable cost per unit and price per unit are changed by the same amount x [x > 0 => increase, x < 0 => decrease]?

    original

    BEQo = F / cm

    = F / [p - v]

    BERo = F / cmr = F / [ [p - v] / p ] new BEQn = F / cm = F / [(p + x) - (v + x)]

    BERn = F / cmr = F / [ [(p + x) - (v + x) ] / (p + x)] difference BEQo - BEQn = BERo - BERn = Example: a company passes on a materials cost increase to its customers, increase is $5 per unit of product. original p v F cm cmr BEQ BER revised p v F cm cmr BEQ BER 0 [F / [p - v] ] * -x = BEQ * -x

    25 13 1440 12 12 / 25 = .48 1440 / 12 = 120 1440 / .48 = 3000

    30 18 1440 12 12 / 30 = .4 1440 / 12 = 120 1440 / .4 = 3600

    BERo - BERn = BERo - BERn = BERo - BERn =


    1/9/2014

    [F / [p - v] ] * -x = BEQ * -x 120 * -5 = -600 3000 - 3600 = -600

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