Respuesta :
Juan maintains his financial statements on each day. He also reports whether he has achieved a break-even in a particular day or not.
Break-even point is a financial management parameter that tells the owner/share-holder how successful he is in his/her business.
Mathematically speaking a break even point is expressed as net revenue earned is equal to the runnig cost of the business ( speaking in per day terms only ).
This is generally expressed as:
[tex]\begin{gathered} \text{Net Revenue = Total variable costs} \\ \end{gathered}[/tex]The net revenue consists of sales and all the other sales costs. The total variable costs are expressed as running costs of the business. Speaking specific to Juan financial reporting, its the day to day cost/revenue he incurs/earns.
For the day 5, he reports his net revenue to be:
[tex]Net\text{ Revenue = 16}[/tex]He also reports his running costs ( variable ):
[tex]Total\text{ variable cost / day = 16}[/tex]The difference between the net revenue earned and the total variable cost incurred in a day can also be defined as break even point as follows:
[tex]\text{Break Even point : Net revenue - Variable cost }\ge\text{ 0}[/tex]If the total revenue of the day is greater than or equal to the variable cost incurred on a day Juan reports this as " Break Even point is achieved ".
So, for the given data of net revenue and variable costs are:
[tex]\begin{gathered} \text{Net Revenue - Variable costs} \\ 16\text{ - ( 16 )} \\ =\text{ 0 }\ldots.\text{ Break even ( satisfies the condition )} \end{gathered}[/tex]Therefore, for day 5 Juan achieves his break even point.
