22.1 - Meaning of Break-even Analysis
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Practice Questions
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Define Break-even Point (BEP).
💡 Hint: Think about when a business isn't making a profit or loss.
What are fixed costs? Give an example.
💡 Hint: Think of expenses that remain the same every month.
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Interactive Quizzes
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What is Break-even Analysis used for?
💡 Hint: Think about its purpose in financial planning.
True or False: Fixed costs vary with production levels.
💡 Hint: Consider the characteristics of fixed costs.
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Challenge Problems
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A company plans to launch a new product with fixed costs of ₹100,000, variable costs of ₹50 per unit, and selling price of ₹150 per unit. Determine the break-even point and explain the implications of the result.
💡 Hint: Calculate Contribution Margin first.
If actual sales are ₹300,000 and the break-even sales are ₹200,000, calculate the margin of safety and discuss its significance.
💡 Hint: Understand how much security market fluctuations provide.
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