SRCSPS Karivena Effects in Application of Breakeven Analysis for Strategic Pricing Advanced Applications in Breakeven Applications

Abstract

The breakeven analysis is confines to determination of Breakeven Point and mostly for studying the effects of changes in volume/value of sales on costs and profits in value. The expressions of the effects of changes in value often mislead the inference/interpretations Ex.Comparing the NPV values in capital budgeting, demand elasticity analysis in economics where it is proved that only the proportions give accurate results i.e. measuring the changes in proportions than in value/volume. Though the theorems/theoretical efforts have been made, in both in economics cost and management accounting but formulations and efforts on calculative formulae are not derived. This may be chiefly because of the BEA concentrating purely on volume/value effects on value of profit and there are no clue regarding proportional effects. Once after my work published in two papers i.e. in May and June 2016 helped to develop a constructive calculative tool/formulae for the theoretical explanations/expressions elaborated in the past.  This work extends the applications of BEA for strategic cost and pricing of products in the most effective way.

In extensions to our innovative formulae developed and published in May and June 2016 issues in IRJBM for calculating the rate of profit on sales together with using the existing formulae in an innovative way for price variations apart from an innovative formula for determining the target rate pricing. This is the research paper innovated the application of the Break Even Analysis for initial pricing and variations in costs as well as prices under strategic considerations as recourse for withstanding to the effects of changes in environmental changes.