Variable Cost = Raw Material Cost + Direct Labor Cost ![]() Variable Cost is calculated using the formula given below Calculate the break-even sales of ASD Ltd. On the other hand, periodic costs such as depreciation, taxes and interest expenses stood at $100,000, $50,000 and $200,500 respectively. The company incurred a raw material cost of $2,500,000 and a direct labor cost of $1,500,000. engaged in pizza selling that generated sales of $5,000,000 during the year. ![]() Let us take the example of another company ASD Ltd. Therefore, the company has to achieve minimum sales of $1.43 million in order to break even at current mix of fixed and variable costs. Break-Even Sales is calculated using the formula given belowīreak-Even Sales = Fixed Costs * Sales / (Sales – Variable Costs)
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