Business Studies

Break Even Analysis

Every business needs to know how many sales have to be made before all expenses are covered and profit is made.  Break even analysis is used to find the break even point.  The break even point is the number of units sold at which the revenue from the sale of these units equals the cost of producing these units.  The cost of producing these units includes the fixed cost and variable costs.

See Business Financials Margins, Mark up and Break Even and read the Business Essentials PDF on Break Even Analysis.

How many ice-creams do I need to sell to make a profit?

The formula for calculating the break-even point is:

Break even point (number of units to sell) = Fixed costs / (Unit selling price – Variable cost)

Advertisements

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s