![]() ![]() Following questions are answered in this case study solution:ġ. Hence, Break Even proves to be a major helping tool in analyzing the business activities and organizing the costs in order to maximize profits. However, all these problems are efficiently solved through proper calculations to achieve the target profit. In this case, Bill French is challenged by major discrepancies that exist between his model and the reality at hand. It helps in allocating proper resources for different operations to reach an efficient outcome. Break Even analysis helps to a great extent in planning and organizing the company’s resources to achieve a certain target profit. ![]() In the meanwhile, this analysis is flexible enough to allow for the changes such as an increase or decrease in the total fixed or variable costs due to various factors. However, this designed model is based on certain assumptions to simplify the whole process for example, averaging the breakeven point for three different products, excluding some variable costs and considering constant sales mix. Furthermore, the Break even analysis is designed to account for all the changes in the costs and profits. The basic purpose is to summarize the costs and profits regarding different products. Bill French, a Staff Accountant, has determined Break Even point for the company for evaluation and planning purposes. ![]()
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