FIN 200 Week 3

Apr 18th, 2015
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Course: Business and Management
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FIN 200 WK 7 DAY 4 - Problems11. Assuming that all other factors remain unchanged, determine how a firm'sbreakeven point is affected by each of the following: The break-even point measures the necessary amount of sales needed in order to cover expenses (fixed and variable) and earn a net income of $0. Therefore, any decrease in sales or increase in expenses will raise the BE point and any increase in sales and decrease in expenses will lower the BE point. The formula is written:BE Pt (Units) = (FC)/(P-VC)BE Pt (Sales) = (FC)/(CM/P)where: FC = Total Fixed CostsP = Sale Price Per Unit

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