TOTAL REVENUE APPLICATION At a price of $3 each‚ SHAPE magazine sells 1.25 million copies of its magazine targeted to young women seeking a healthier lifestyle. If the price is increased to $3.25 each‚ only 1 million copies will be sold. Fixed costs are $1 million and unit variable costs are $0.50 per magazine. From the information provided here‚ what is SHAPE magazine ’s total revenue‚ obtained at the higher price? a. $3‚750‚000 b. $3‚250‚000 c. $2‚125‚000 d. $1‚625‚000 e. $675
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BREAK EVEN ANALYSIS Introduction Break-even analysis is a technique widely used by production management and management accountants. It is based on categorising production costs between those which are "variable" (costs that change when the production output changes) and those that are "fixed" (costs not directly related to the volume of production). Total variable and fixed costs are compared with sales revenue in order to determine the level of sales volume‚ sales value or production at which
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BREAK-‐EVEN ANALYSIS INTRODUCTION • Every business manager should want to know how many products need to be sold or services provided to cover the total costs of the business. That is they need to know what it takes to break even. • If a business cannot break-‐even then decisions need to be made to correct the situation
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What is break-even analysis? Analysis to establish that the point‚ by which the income received equals the costs tied together with obtaining the income. Break-even analysis predicts what is known as the margin of safety‚ amount which the income exceeds break-even point. It is an amount that the income can fall while still staying above the break-even point. What is break-even point? The break-even point is‚ a point‚ by which increases equal losses in general. The break-even point determines when
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Introduction: Break-even analysis is a technique widely used by production management and management accountants. It is based on categorizing production costs between those which are "variable" (costs that change when the production output changes) and those that are "fixed" (costs not directly related to the volume of production). Total variable and fixed costs are compared with sales revenue in order to determine the level of sales volume‚ sales value or production at which the business makes
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article: Break-even (economics) In economics & business‚ specifically cost accounting‚ the break-even point (BEP) is the point at which cost or expenses and revenue are equal: there is no net loss or gain‚ and one has "broken even." A profit or a loss has not been made‚ although opportunity costs have been "paid‚" and capital has received the risk-adjusted‚ expected return.[1] It is shown graphically as the point where the total revenue and total cost curves meet. In the linear case the break-even
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is the Break even. The Break even point is the point at which revenue is exactly equal to costs. At this point‚ no profit is made and no losses are incurred. The break even point can be expressed in terms of unit sales or dollar sales. That is‚ the break even units indicate the level of sales that are required to cover costs. Sales above that number result in profit and sales below that number result in a loss. The break even sales indicate the dollars of gross sales required to break even. The determination
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Chapter 7 - [ cost – volume – profit Analysis leverage ] Cost – Volume – profit Analysis {or Break ever analysis ) The break even point (BEP) man be defined as that level of sales at which total revenue in equal to total costs x the co will make no profit x also will have no loss. The volume of sales corresponding to BEP is known as break even output . If the co producer & sells less than the BE output it would in an a loss &if it producer &sells more than the BE output it
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Contribution Margin and Breakeven Analysis Simulation MBA 503 University of Phoenix Contribution Margin and Breakeven Analysis Simulation Maria Villanueva‚ the Chief Financial Officer of Aunt Connie’s Cookies‚ must make several decisions in the "Contribution Margin and Breakeven Analysis" Simulation in order to maintain the success of the company. These decisions involve applying the concept of both contribution margin and breakeven analysis to make the best decision for the company. When
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WENDY STEDMAN‚ UNIT 5 MANAGERIAL ACCOUNTING CVP/BREAK EVEN ANALYSIS Deer Valley Lodge‚ a ski resort in the Wasatch Mountains of Utah‚ has plans to eventually add five new chairlifts. Suppose that one lift costs $2 million‚ and preparing the slope and installing the lift costs another $1.3 million. The lift will allow 300 additional skiers on the slopes‚ but there are only 40 days a year when the extra capacity will be needed. (Assume that Deer park will sell all 300 lift tickets on those 40
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