does anyone know how to calculate fixed costs, variable costs and break even points on balance sheets, cash statements and income statements?
Since this is not my area of expertise, I searched Google under the key words "costs balance sheets" to get these possible sources:
http://www.va-interactive.com/inbusiness/editorial/finance/intemp/balance.html
http://ideas.repec.org/p/rba/rbardp/rdp9311.html
http://www.bizminer.com/balance-sheet.asp
http://www.thebusinessplanstore.com/balancesheet.htm
http://www.accountingcrosswords.com/balance-sheet.php
In the future, you can find the information you desire more quickly, if you use appropriate key words to do your own search. Also see http://hanlib.sou.edu/searchtools/.
I hope this helps. Thanks for asking.
Yes, I can help you with calculating fixed costs, variable costs, and break-even points on balance sheets, cash statements, and income statements. Let's break it down step by step:
1. Fixed Costs:
Fixed costs are expenses that do not vary with the level of production or sales. They remain the same regardless of the production volume. To calculate fixed costs, you need to review your income statement or the expense section of your cash statement and identify the expenses that do not change with the level of activity. Some common examples of fixed costs include rent, salaries, insurance, and depreciation.
2. Variable Costs:
Variable costs, on the other hand, are expenses that change in direct proportion to the level of production or sales. These costs increase or decrease based on the volume of activity. To calculate variable costs, identify the expenses that vary directly with the level of production or sales. Examples of variable costs include raw materials, direct labor, and sales commissions.
3. Break-Even Point:
The break-even point is the level of production or sales at which total revenue equals total costs, resulting in zero profit or loss. To calculate the break-even point, you need to determine the contribution margin per unit and the fixed costs.
- Contribution margin per unit: This is calculated by subtracting the variable cost per unit from the selling price per unit. The formula is contribution margin per unit = selling price per unit - variable cost per unit.
- Fixed costs: As mentioned earlier, fixed costs do not change with the level of activity.
Once you have determined the contribution margin per unit and the fixed costs, you can calculate the break-even point using the following formula:
Break-Even Point (in units) = Fixed Costs / Contribution Margin per Unit
To calculate the break-even point in dollars, multiply the break-even point (in units) by the selling price per unit.
Remember, all these calculations are based on the information provided in the financial statements, specifically the income statement and cash statement.
It's important to note that the specific format and terminology may vary depending on the company and the accounting standards being used.