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A Mathematical Study of Break-Even Analysis Based on Dairy Farms in Bangladesh
International Journal of Economic Behavior and Organization
Volume 8, Issue 2, June 2020, Pages: 38-43
Received: May 22, 2020; Accepted: Jun. 11, 2020; Published: Jun. 23, 2020
Authors
Jinnat Ara, Department of Applied Mathematics, Noakhali Science and Technology University (NSTU), Noakhali, Bangladesh
Mir Md. Moheuddin, Department of CSE (Mathematics), Atish Dipankar University of Science and Technology (ADUST), Dhaka, Bangladesh
Muhammad Abdus Sattar Titu, Department of Mathematics (General Science), Mymensingh Engineering College (MEC), Mymensingh, Bangladesh
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Abstract
Break-even analysis is the analysis of the level of sales at which a company would make zero profit and it assists management in determining the number of products to be produced to attain desired profits, the number of products to be produced at a minimum threshold level, gaining desired profits under different cost and volume relationship. This technique has been applied to focus on how selling prices, the volume of sales, total costs such as variable cost and fixed costs as well as the mix of product sold affects profit. This research study aimed to determine the profitability position of several dairy farms in Bangladesh based on their cost-volume of the production. The study is conducted on two dairy farms named as Subarna Agro-Based Initiative and Nusrat Agro & Dairy Farm in Noakhali district. To obtain the objectives, ten years of financial data are taken from the period of 2009-10 to 2018-19 in the form of primary data. Utilizing these data profit volume ratio (P/V ratio), break-even point (BEP) and margin of safety are calculated for ten years. From the analysis, a P/V ratio from 2009-10 to 2018-19 is gradually raised and also break-even point demonstrates an optimal level considering the level of sales volume in ten years. Besides, the margin of safety helps us to know the risk level of a business. As-a-results, this article will lead to making how much cost to be spent to produce the required number of volumes of products to achieve the desired profit goal.
Keywords
Break-Even Analysis, Profit Volume Ratio, Break-Even Point, Margin of Safety
Jinnat Ara, Mir Md. Moheuddin, Saddam Hossain, Muhammad Abdus Sattar Titu, A Mathematical Study of Break-Even Analysis Based on Dairy Farms in Bangladesh, International Journal of Economic Behavior and Organization. Vol. 8, No. 2, 2020, pp. 38-43. doi: 10.11648/j.ijebo.20200802.13
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