COST ACCOUNTING AND BREAK EVEN ANALYSIS
Cost accounting provides the detailed cost data that management need to control current operations and plan for the future. DETERMINING PRODUCT/SERVICE COST To determine products or services cost you need to trace costs to products/services. Prime cost + Factory overheads = Cost of production Cost of production + Selling and Administration overheads = Total costs BREAK EVEN ANALYSIS It is a method of studying the relationship between revenue and cost, in relation to sales volume of a business enterprise, and the determination of volume of sales at which total costs are equal to revenue. Key Point: No profit, No loss or Zero profit and Zero loss = Break Even point. Break even point (in unit) = Fixed expenses/ Selling price per unit – Marginal cost per unit Or = ...