The break-even point means the level of output or sales at which no profit or loss is achieved. It indicates the position at which marginal profit or contribution is just sufficient to cover fixed overheads. In other words, a business is said to break-even when its income equals its expenditure. When production exceeds the "Break-even point", the business makes a [...]
There are following two methods to obtain break-even point: 1. Mathematical Method 2. Graphical Method. 1. Mathematical Method: Let cost be the common variable in two situations 1 and 2, then cost equations will be; C1 = f1(x)... a function of (x) ...(1) C2 = f2(x)... another function of (x) ...(2) C1 – may be as total cost, annual cost, [...]
After reading this essay you will learn about interest, annuities and profit. Interest: The term "Interest" means periodic payment for the use of "Capital". It can be seen both from the borrowers' as well as lender's point of view. The borrower receives money which forms the capital for production of goods and services. Thus he earns profit by the borrowed [...]