Application: Break-Even Analysis
When expenses and revenues are equal, this is known as the “break-even point” or BEP. To determine break-even, an examination of fixed and variable costs (expenses) in relationship to revenues is necessary. Understanding where the BEP is for a given product or service helps managers determine how to make modifications to increase profitability.
LaTricia Jones is planning to make a unique toy that will keep small children entertained for hours! She believes that parents everywhere will want to buy her toy, and she needs to determine her costs and the number of toys she needs to sell before earning a profit.
After researching her costs, she has come to the following conclusions.
Submit your Application (both your Excel and Word files) by Day 7.
To submit your Assignment, do the following:
General Guidance on Application Length:
Your Application, due by Day 7, will typically be 2–3 paragraphs in length as a general expectation/estimate for each bullet point. Refer to the rubric for the Week 6 Application for grading elements and criteria. Your Instructor will use the rubric to assess your work.