| Resumo: |
The significance of a break-even point analysis is much important to the small- scale enterprises in determining profit or loss incurred. In this study, a case study approach was used to test this concept on iru production using structured oral interviews and visual observation of a production centre in Nigeria. Data analysis was achieved using production cost, the unit quantity and break-even point analysis. The results show that the monthly average cost of N 32,237.00, the monthly average variable cost of N71,334.00, Contribution Margin Ratio of 47.06 % and break-even sales of N 68,502.00 were obtained using a traditional method of iru production (TIPP). In a mechanized method (MIPP), monthly average fixed cost of N 85,887.00, the monthly average variable cost of N 55,000.00, monthly average sales of N 141,500.00, Contribution Margin Ratio (CMR) of 61.13 % and break-even sales of N 140,499.00 were obtained. High CMR value of MIPP to TIPP signifies a higher level of safety in the enterprise. Also, the graphical method revealed that MIPP is best option to choose by the processor for the large-scale productions since the process took lesser production costs, yields more outputs and gave more profits at any point above BEP compare to TIPP counterpart. Thus, the enterprise earns more profit from iru production at any point above the equilibrium point (break-even point) with the use of a processing machine. The research could serve as a reference point to promote mechanization for improving iru production.
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