Description
Break-even analysis involves the analysis of cost-volume-profit relationships of products and services in order to make operating decisions to which the break-even point is critical as the benchmark for determining the profitability of the product/service. This assessments focus on the ability of the candidate to apply the principles of break-even analysis with specific reference to:
- understanding the concept of break-even analysis as a management tool
- understanding the calculation and interpretation of the break-even point
- applying the break-even point to make operating decisions
- calculating break-even points for multiple products without constraints
- preparing a production plan with a single operating constraint
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