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List the significance of break – even analysis

List the significance of break – even analysis

Answers

Wilfred
• It helps management in cost – control, profit, planning and decision making.
• It is helpful in setting up flexible budgets for different levels of activity.
• It is useful for performance appraisal of different production units and departments for control purposes.
• It is helpful in fixing selling prices, volume of production and sales for attaining the desired profits and meeting the proposed expenditure.
• It is also helpful in choosing the most profitable product mix and determining the optimum sales – mix.
• It is useful in selecting the most profitable alternative
• It is also helpful to the management in deciding upon changes in capacity and reduction in existing selling price.
Wilfykil answered the question on April 15, 2019 at 09:53

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