Join Earl Kay Stice for an in-depth discussion in this video Break even, part of Accounting Foundations.
Another illustration of the use of managerial accounting…is break-even analysis.…And let me explain this by the use of a real example…based on an experience my wife had.…My wife's name is Ramona and many years ago, back in 1985,…she was helping organize a charity banquet and a raffle.…So you bought a ticket to go to this charity banquet.…The ticket cost $250, pretty expensive.…Seems expensive now. It was real expensive back in 1985.…Your ticket was thrown into a container…when you went to the charity banquet,…and at the end of the banquet…they randomly stirred them all up,…pulled out one ticket, if your ticket was pulled out,…you got a brand new car costing $18,000.…
That doesn't sound like much.…Back in 1985 that was a really nice car.…The other cost is this.…It was a very fancy banquet so the caterer…was charging $40 per person for the banquet.…So let's review those three numbers.…People come to the charity banquet and pay $250 for each ticket.…The caterer is charging the charity $40…to give food to each person who comes.…
- What is accounting?
- Working with balance sheets and income statements
- Determining the costs of products
- Performing break-even analysis
- Determining average and marginal tax rates
- Understanding tax deductions and credits
Skill Level Appropriate for all
1. Basics of Accounting
2. Financial Accounting
3. Managerial Accounting
4. Income Taxes
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