Chapter 21, Problem 5APSA

To determine

Introduction

Break-even analysis is an analysis where the sum total of the fixed and variable costs are compared with the sales revenue for determining the level of production, sales volume or sales value at which the company makes neither a profit nor a loss. This point is called the "break-even point".

To determine

1. The break-even point in dollar sales for each product.

2. The financial results for the next year when sales of each product decline to 30000 units.

3. The financial results for the next year when sales of each product increase to 60000 units.

4. The product that will experience a greater loss

5. The factors that create the different cost structures.