The Formula of Breakeven point (in units)= Fixed Cost / Contribution per unit
breakeven point (units) = fixed costs/contribution contribution = selling price - variable costs per unit
Breakeven point is the point where firm has no profit no loss while breakeven analysis is the process of finding out the breakeven point.
When fixed assets reduces it also reduces the breakeven point because now less number of units required to fulfill the fixed cost.
Breaven point is the point of sales which must be acheived to cover all the expenses and to start earning profit.
Formula for Breakeven point: Breakeven point = Fixed Cost / Contribution margin ratio Contribution margin ratio = Sales / contribution margin Contribution margin = sales - variable cost
breakeven point (units) = fixed costs/contribution contribution = selling price - variable costs per unit
where all your Fixed Costs are covered. To find the number of units at which you will breakeven you divide fixed costs by the contribution per unit
50%
Breakeven point is the point where firm has no profit no loss while breakeven analysis is the process of finding out the breakeven point.
When fixed assets reduces it also reduces the breakeven point because now less number of units required to fulfill the fixed cost.
Breaven point is the point of sales which must be acheived to cover all the expenses and to start earning profit.
Yes breakeven point will rise because contribution margin per unit reduces that's why more units require to recover fixed cost.
Formula for Breakeven point: Breakeven point = Fixed Cost / Contribution margin ratio Contribution margin ratio = Sales / contribution margin Contribution margin = sales - variable cost
breakeven point will decrease
1. Breakeven point = fixed cost/ contribution margin ratio contribution margin ratio: (sales - variable cost)/sales Sales = 20000 * 40 = 800000 Less: Variable cost = 20000 * 10 = 200000 Contribution margin = 600000 Contribution margin ratio = 600000/800000 = .75 Breakeven point in dollars = 120000/.75 = $160000 breakeven point in units = 160000 / 40 = 4000
decrease <--------WRONG!!!!! The operating breakeven point will remain unchanged.
Breakeven point = Fixed cost/Contribution margin Contribution margin = sales price - variable cost contribution margin = 20 - 7 = 13 Breakeven point = 173000/13 = 13307.7 units