ECONOMICS

Detailed explanation-1: -To calculate the break-even point in units use the formula: Break-Even point (units) = Fixed Costs ÷ (Sales price per unit – Variable costs per unit) or in sales dollars using the formula: Break-Even point (sales dollars) = Fixed Costs ÷ Contribution Margin. Here’s What We’ll Cover: What Is the Break-Even Point?

Detailed explanation-2: -equation method. method used to find the break-even point or target income volume in Cost-Volume-Profit (CVP) Analysisor break-even analysis. The equation is: Sales = Variable Costs + Fixed Costs + Net Income.

Detailed explanation-3: -Use the following calculations to find where your profits start. To calculate your break-even (dollar value) before net profit: Break-even ($) = overhead expenses ÷ (1 − (COGS ÷ total sales))

Detailed explanation-4: -The key CVP formula is as follows: profit = revenue – costs. Of course, to be able to apply this formula, you need to know how to work out your revenue: (retail price x number of units). Plus, you need to know how to work out your costs: fixed costs + (unit variable cost x number of units).

Detailed explanation-5: -In corporate accounting, the breakeven point (BEP) formula is determined by dividing the total fixed costs associated with production by the revenue per individual unit minus the variable costs per unit. In this case, fixed costs refer to those that do not change depending upon the number of units sold.