What does break even mean?

When solving problems, you must clearly explain all the steps you are doing, and why are you making those steps.

·  Show all your workings, a numeric answer is not enough.

·  You should submit a document in Word format.

·  You should submit a document in Excel format showing all calculations.

Formalities:

·  Use one page per answer.

·  Cover, Table of Contents, References and Appendix are excluded of the total wordcount.

·  Font: Arial 12,5 pts.

·  Text alignment: Justified.

It assesses the following learning outcomes:

·  Understand the three basic types of manufacturing.

·  Identify direct and indirect costs

·  Prepare a schedule of costs of finished goods

·  Distribute overheads into a product cost.

·  What drives the overhead cost

·  Differentiate between Job order, Process costing

·  Apply cost volume profit analysis in business, understand economies of scale.

Assignment:

Questions

1.  1.- Explain direct production cost versus indirect production const, give a numerical example. (5 points)

2.  2.- Explain variable production cost versus fixed production costs, give a numerical example. (5 points)

3.  3.- Explain period cost versus product cost, give a numerical example. (5 points)

4.  4.- What does break even mean? (5 points)