what is break-even point? explain the important managerial users of break even analysis
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The break-even chart helps the management to know at a glance the profits generated at the various levels of sales. The safety margin refers to the extent to which the firm can afford a decline before it starts incurring losses
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Uses of Break-Even Analysis:
(i) It helps in the determination of selling price which will give the desired profits. (ii) It helps in the fixation of sales volume to cover a given return on capital employed. (iii) It helps in forecasting costs and profit as a result of change in volume.
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