please write a break evening analysis for starting a new che

please write a break evening analysis for starting a new cheese import company in the US

be detailed

Solution

Answer :

Break Even Analysis is a situation of no profit or loss meaning it is a point in your business operation when the total cost of doing will be equal to the total revenue generated from the business operations.

To calculate the break-even point total fixed and variable cost is compared with the sales revenue in order to ascertain the level of sales volume or sales value at which the business is at a situation of no profit or no loss.

Break even analysis is done by accountants or finance managers that in what time a certain business will become profitable and what is its feasibility. Break even analysis is also a control technique in management domain which helps the manager to control the activities which are going against what is planned.

For starting a cheese import company you will be doing some investment and that will become your fixed cost, the cheese you will import to sell in the US market will come at a cost and on which you will add other costs such as marketing expenses, freight, delivery charges which will become your variable component. You have to take out your investment from the business first and then you can earn the profits.

The formula which you can use to find out the break even for your business is as follows:

Break Even Point= Fixed Costs ÷ (Price - Variable Costs)

The results derived here will be in units meaning how many units of cheese you will have to sell to achieve break-even point.

Putting it simpaly the breakeven point is equal to the total fixed costs divided by the difference between the unit price and variable costs.