question
Break even analysis
answer
It is a common business management tool used to measure weather a business should invest into the certain product or company
question
Break even
answer
Break even occurs when the company sales revenue exceeds its production cost
question
Formula for break even quantity
answer
Fixed/ (selling price- average cost)
question
Unit contribution
answer
it is a term that refers to a firms cost and average variable cost.
Formula
Price - average variable cost
Formula
Price - average variable cost
question
Total contribution
answer
(price -average variable cost)x quantity
calculate profit or loss formula
((price -average variable cost)x quantity ) - Total fixed cost
calculate profit or loss formula
((price -average variable cost)x quantity ) - Total fixed cost
question
Value added per unit
answer
Price - average total cost
question
Margin of safety
answer
It is the range of output where profit is made
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Target profit output
answer
it is the the total level of output for a company to reach its target profit
formula for target profit output
(fixed cost+target profit)/(price- average variable cost)
formula for target profit output
(fixed cost+target profit)/(price- average variable cost)
question
Target profit
answer
Target profit is the total amount of profit a firm expected to get in a given time period.
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Target price
answer
Target price is the total amount customers have to pay per unit for them to reach their target profit
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