Break Even Analysis

In: Business and Management

Submitted By swsb
Words 405
Pages 2
Paper Title: Break Even Analysis

Managerial Accounting

Break Even Analysis LASA case M3A2: In this scenario in order to ensure that we identify all levels of sales where the profit is zero. Manager’s has to ensure that they perform a comprehensive Break Even Analysis between the number of units sold for three different products using the, variable cost, unit price and the fixed cost. This will be accomplished by using the data provided below for this LASA case study.

(A). Contribution Margin: Determine Contribution Margin by identifying the profit made on the sales, minus the variable costs.
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(B). The Weighted Average Percentage Margin: The Weighted Average number represents the difference between revenue and variable cost, is the one used to apply to the break-even point calculation.
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(C). Avoidable Fixed Cost: Number of Units sold to find the Break Even Point.

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(D). Avoidable Cost –CM: This allows you to determine your operating profit after the fixed costs are applied.

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(E). Break Even Analysis Outcome:

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Based on the comprehensive analysis identified in the complete Break Even Analysis, the Piedmont Fasteners Corporation needs to implement a job order or process-costing system to accumulate cost. With the implementation, it will allow the company to process job order faster to meet the demand of the customer, due to the fact that many consumers are relying more on web 2.0 and 3.0 technology. It will also reduce costly work order errors that are associated with time, due to human error. This complete change will provide the company the competitive edge it needs to compete with other company in there market with increase revenue. I would recommend that we move forward with the implementation of the job order…...

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