Chapter 19, Problem 19.6BYP

To determine

Break-Even Point: It is the point of sales at which entity neither earns profit nor suffers a loss. It can also be said that the point of sales at which sales value of the entity recovers the entire cost of fixed and variable nature.

Budget: A statement which consists of estimated revenue and expenses for a particular period is known as budget. It helps to plan the activities in the accordance to achieve the objectives of the organization. There are the various types of budgets such as production budget, purchase budget, sales budget and cash budgets are maintained by the companies.

Balanced Scorecard: The trade-off between innovations and cost effectiveness is called balanced scorecard approach. Sometimes managers focus too much on innovations that result in extra costs or wastes of business funds. So to avoid that situation the balanced scorecard approached is implemented.

Capital Budgeting: The method to evaluate the long-term decision and take the decisions to accept or reject the project on the basis of profitability to the investor. It includes the analysis of related business opportunities and identification of profitable project.

To explain: (a) An example of break-even point, (b) an example of budget, (c) an example of balanced scorecard and (d) an example of capital budgeting.