Break-even Point: It refers to a point in the level of operations at which a company experiences its revenues generated is equal to its costs incurred. Thus, when a company reaches at its break-even point, it reports neither an income nor a loss from operations. The formula to calculate the break-even point in sales units is as follows: Break-even point in Sales ( units ) = Fixed Costs Contribution Margin per unit To compute: the anticipated break-even sales (units).
Break-even Point: It refers to a point in the level of operations at which a company experiences its revenues generated is equal to its costs incurred. Thus, when a company reaches at its break-even point, it reports neither an income nor a loss from operations. The formula to calculate the break-even point in sales units is as follows: Break-even point in Sales ( units ) = Fixed Costs Contribution Margin per unit To compute: the anticipated break-even sales (units).
Solution Summary: The author explains the formula to calculate the break-even point in sales units.
Break-even Point: It refers to a point in the level of operations at which a company experiences its revenues generated is equal to its costs incurred. Thus, when a company reaches at its break-even point, it reports neither an income nor a loss from operations. The formula to calculate the break-even point in sales units is as follows:
Company A has the following data:
• Days in inventory: 18 days
Days in accounts receivable: 12 days
• Days in accounts payable: 20 days
Company B has:
• Days in inventory: 22 days
• Days in accounts receivable: 15 days
• Days in accounts payable: 30 days
What is the cash-to-cash cycle time for Company A and
Company B?
Chapter 21 Solutions
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