Question

What information provided by a variable costing income statement is used in computing the break-even point? Is this information on absorption costing income
statement? Explain your answer.​

Answer 1

Answer:

Information needed from a variable costing income statement to compute the break even point are the revenues, variable production expenses, and fixed costs.

Answer 2

Answer:

Revenue or sales, cost of goods sold, expenses, gross profits, taxes, net earnings and earnings before the taxes information provided by a variable costing income statement is used in computing the break-even point Is this information on absorption costing income statement.  

Explanation:

In economics, business, and cost accounting, break even analysis refers to the point where total cost and total revenue are equal. The number of units or dollars of revenue required to cover all costs is determined using a break even point analysis (fixed and variable costs). A variable costing income statement is defined as all of the irregular expenses deducted from the company's revenue to arrive at a separately recognised contribution margin. This statement is used to calculate the amount of expenses that is directly proportional to revenue. All variable expenses are taken from revenue to get at a separately stated contribution margin, from which all fixed expenses are reduced to arrive at the net profit or loss for the period on a variable costing income statement.