4.3 Break-even analysis Consider the following data: Selling price $10 per unit Variable cost $6 per unit Fixed costs $1,000 How many units need to be sold to break even? 4.4 Profit targets Using the same data as in Question 4.3, if fixed costs rise by 20% and the company need to make a profit of $350, how many units need to be sold?
Variance Analysis
In layman's terms, variance analysis is an analysis of a difference between planned and actual behavior. Variance analysis is mainly used by the companies to maintain a control over a business. After analyzing differences, companies find the reasons for the variance so that the necessary steps should be taken to correct that variance.
Standard Costing
The standard cost system is the expected cost per unit product manufactured and it helps in estimating the deviations and controlling them as well as fixing the selling price of the product. For example, it helps to plan the cost for the coming year on the various expenses.
4.3 Break-even analysis
Consider the following data:
Selling price $10 per unit
Variable cost $6 per unit
Fixed costs $1,000
How many units need to be sold to break even?
4.4 Profit targets
Using the same data as in Question 4.3, if fixed costs rise by 20% and the company
need to make a profit of $350, how many units need to be sold?
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