Break-Even Analysis and Job Production

To calculate the level of sales needed to cover all costs of production.

It generates a positive safety margin and profit for the business.

Job production involves customizing an individual product tailored to specific client requirements.

<p>It helps determine how many units must be sold to avoid losses and achieve profitability.</p> Signup and view all the answers

<p>The difference between actual sales and break-even sales, indicating the amount of sales cushion.</p> Signup and view all the answers

<p>Break-even analysis helps companies set prices by identifying the minimum sales volume needed to cover costs, enabling them to determine a price that ensures profitability.</p> Signup and view all the answers

<p>The key components include fixed costs, variable costs, selling price per unit, and the break-even sales volume.</p> Signup and view all the answers

<p>If fixed costs increase, the break-even point rises, requiring more sales to cover expenses; conversely, an increase in variable costs also raises the break-even point.</p> Signup and view all the answers

<p>Job production typically incurs higher costs due to customization and lower economies of scale, unlike mass production which spreads costs over larger quantities.</p> Signup and view all the answers

<p>A positive safety margin indicates that the business is generating sales beyond the break-even point, which enhances profitability and provides a buffer against potential losses.</p> Signup and view all the answers