MANAGEMENT

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.

Detailed explanation-2: -Break-even point in units = Fixed costs ÷ Contribution margin per unit. Your break-even point in units will tell you exactly how many units you need to sell to turn a profit. If you’re able to sell more units beyond this point, you’ll be making a profit.

Detailed explanation-3: -Attaining the break-even point means having your total costs equal your total revenue. Before you earn any profit with your business, the break-even point must be reached. The break-even point is when total costs are equal to total revenue.

Detailed explanation-4: -Break-Even Sales Formula = FC / (ASP-AVC) FC is the Fixed Cost. ASP is the Average Selling Price per unit. AVC is the Average Variable Cost per unit.