Assumptions of break even analysis pdf

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In this article we will discuss about:- 1. Introduction to Break-Even Analysis 2. Assumptions of break even analysis pdf of Break-Even Analysis 3. It is a function of three factors, i.


It aims at classifying the dynamic relationship existing between total cost and sale volume of a company. The total costs may be classified into fixed and variable costs. The cost and revenue functions remain linear.

The price of the product is assumed to be constant. The volume of sales and volume of production are equal.

The fixed costs remain constant over the volume under consideration. It assumes constant rate of increase in variable cost.

It assumes constant technology and no improvement in labour efficiency. The price of the product is assumed to be constant. The factor price remains unaltered.

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