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Break-even analysis - Coggle Diagram
Break-even analysis
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BREAKING EVEN
After gathering information about pricing and fixed and variable cost of firm you need to calculate how many units of what level of output it needs to sell to cover all its costs
The level of output the current total cost equal the total revenue which is also known as the break-even point
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When throwing them break-even chart some things need to be considered Switch off fixed costs, with no units of Alfred there will be no variable costs, since fixed costs still have to be paid with no output produced the total cost line begins where the fixed cost line starts, with no output so there will be no Revenue, the break-even point is the point where theTC line intersects with the TR line, and the left of the break-even point shows the Lost made by firm where is the right of this point shows the profit
Margin of safety it's the range of output over which profit is made
Margin of safety=current output-break-even output
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BENEFITS O BREAK-EVEN
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change them prices and costs and their impact on profit or loss and someone can be compared by using the charts or by calculations
CONTRIBUTION
its an important concept when determining the overall profitability brought about by given products in a business.
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