Finance for Managers: Break-Even Analysis and Organisational Cost

FINANCE FOR MANAGERS

Introduction
The presentation will focus primarily on break-even concept, its calculation, strengths
and weaknesses of using break-even analysis and impact of changes in Cost and
revenue on break-even output. In accordance with the case study, break-even
calculation will be done, and charts will be presented accordingly. Furthermore, an
analysis will be done on organisational Cost and their impact on decisions. Decision
making information will be presented with break-even charts in this presentation.

3.1. Organisational Cost Analysis
Depending on the performance within each expense, the definition of
organizational costs differs. Organizational costs can, in the wider
definition, be defined as either set-up costs or as operational costs.
Organizational set-up expenses are those expenses associated with the
set-up of a company, including such legal assistance, financial
accounting, property taxes, etc. These are early additional expenses to
build a company. The organizational operating costs span a wide
variety of distinct costs related to their procedure, including such
fixed costs, variable costs, indirect costs, and so on.

Cont’d
● Some categories of costs are mentioned here:
- Fixed Cost
- Variable Cost
- Direct Cost
- Indirect Cost
- Total Cost
- Unit Cost
- Marginal
- Opportunity Cost
- Operating Costs
- Overheads