Question

What are the various formulas available to compute break even?

Answer 1

Break-even analysis alludes to the investigation of connection between costs, volume and" benefit at various degrees of deals or creation. It additionally alludes to a strategy of verifying that degree of tasks where absolute revenues equivalent complete costs, i.e., point of no benefit, no loss/misfortune.

Formulas available to compute break even

1) Sales revenue at break-even point = Fixed Costs + Variable Costs

2) Break-Even Point in Units: = fixxed cost / (selling price per unit - variable cost per unit)

= fixed costs / contribution per unit

3) B.E.P (sales amount) = (Fixed Cost/Total Contribution) * 100

4) Cash Break- Even Point (in Units) = Cash Fixed Cost/Cash Contribution per unit

5) Composite Break-Even Point (in Sales value) = Total Fixed Cost/Composite P/V Ratio

where, Composite P/V Ratio = Total Contribution/Total Sales × 100

6) Sales at Break-Even Point = Total Sales - Margin of Safety

where , Margin of Safety (M/S) = Profit/P/V Ratio

7) Break-Even Sales = Fixed Costs * Sales / (Sales – Variable Costs)

8) Break-Even Price = (Fixed Cost / Production Volume) + Variable Cost.