Essay Available:
Pages:
1 pages/≈275 words
Sources:
2
Style:
APA
Subject:
Business & Marketing
Type:
Essay
Language:
English (U.S.)
Document:
MS Word
Date:
Total cost:
$ 4.32
Topic:
Importance of Knowing the Break-Even Point in Businesses
Essay Instructions:
Go to the U.S. Small Business Administration website (https://www(dot)sba(dot)gov/) and search for "break-even point."
Then answer the questions posed:
Why is it important for a business to know their break-even point? Cite an example and support your answer with your rationale.
How long should a business be prepared to survive financially if they do not make a profit? (Support your answer with references.)
What resources could Tim, the shop's owner in the simulation, use if he needs to gain access to more funds to operate his business in the near future?
Essay Sample Content Preview:
The Break-Even Point
Author
Affiliation
Course
Instructor
Due Date
The Break-Even Point
According to the United States Small Business Association (n.d), the Break-even point is when the total cost matches the total revenue of a business; at this point, the business neither makes a loss nor a profit. Apart from profits, the breakeven point is crucial for a business owner because it tells the owner at what point do they realize their return. Failure to undertake a breakeven analysis may take your company many years to turn a profit after years of losses—for instance, a company's fixed cost may be $10,000 in a year. The variable cost is $25 per unit, while the selling price is $50. The company will be forced to produce 400 units in order to break even. A break-down of the cost includes; 10,000 (fixed cost) + 25*400 (variable cost) = $20,000. While the revenue for 400 units = 400*50 = $20,000. Therefore, the company needs to produce 400 units to break even.
Barrera (n.d.) suggests that a business should be able to stay in business for about one to six months ...
Get the Whole Paper!
Not exactly what you need?
Do you need a custom essay? Order right now: