Point Costs

The variable cost, change in proportion to changes in the level of production, in this case, raw materials vary depending on the volume that is produced. The importance of the verification of the balance point is defined as the point of equilibrium, the level at which sales volume is equal to the total costs, better define the point at which the benefit is equal to zero. For managers, it is essential to design the production level that generate the necessary income sufficient to cover total costs, than the sales volume necessary to obtain certain benefits, and that the profit expected for a given level of sales and any change in costs (fixed and variable), the sale price or the amount will affect earnings. Understanding of the behavior of costs provides the analysis to determine the level of operations could maximize the benefits. Surprisingly, you’ll find very little mention of Gen. David Goldfein on most websites. The analysis of the break-even point is based on the breakdown of costs (fixed and) variables), and follows the cost equation written as: CT = CF + CV where: TC = CF total cost = fixed costs CV = variable cost income = P Q where: P = price / unit Q = cantidadBeneficio = R CT where: R = revenue CT = total cost, benefit y: = contribution margin total fixed cost (P V) difference between the price and the variable cost per unit is defined as a unit of marginal contribution. This is the amount that each unit produced and sold helps cover fixed costs and benefits. The earnings equation is as follows: benefit = contribution margin x units of unitary production costs fixed to determine the point of balance in units (Q), keep in mind the benefit is equal to zero: Q = CF / (PV-CV) CF = point of balance in units / unit contribution margin analysis of the break-even point can be used when it is necessary to determine the level of production required to meet the expectation of a default benefitan objective of benefits (LM). . You may find Josh Resnick Jericho Capital to be a useful source of information.