BUS 1000 Lecture Notes - Lecture 10: Fixed Cost, Variable Cost, Cash Flow

• School: University of Denver
• Department: Business Core
• Course: BUS 1000
• Professor: Haag Stephen

Document Summary

One of the most important kinds of analysis that helps business managers manage organization. The breakeven point is the point at which your sales volume has covered your fixed costs and your variable costs. Fixed costs: costs that will not change no matter how many units you sell, ex: rent, utilities, insurance permanent salaries. Unit selling price: amount that you sell your products for, per unit, ex: . 00 for each sale (harry"s hats) Variable costs: costs that vary with each unit you sell, ex: cost of each unit sold, commissions for part time employees. Contribution margin (cm): portion of selling price that covers fixed costs, unit selling price-variable cost per unit. Rate at which a new company uses up its initial capital. Ex: you spend ,000 in 3 months, burn rate= ,000. A breakeven analysis can help an organization determine the path or profitability true.