Summary It is known that cost per call does not factor in the number of calls required to make a sale, and measuring the break-even sales volume helps salespeople determine the best customer or sales size. This chapter describes the break-even point as the minimum customer size needed, and...
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 Co...
The break-even point is a fundamental piece of information for your price calculation. Even a small change in the selling price, depending on the sales volume, can significantly lower the break-even point and increase the profit considerably. The exact information on when and how you reach the...
The Break-Even Point can be used in sensitivity analysis to evaluate the impact of changes in variables such as costs, pricing, or sales volume on the company’s profitability. By assessing how variations in these factors affect the Break-Even Point, businesses can better understand their risk ...
break-e·ven point (brāk-ē'vĕn poynt) The point in sales volume at which total revenue equals total costs; indicating a balance. Sales volume below the break-even point will cause a negative cash flow (loss); sales volume above the break-even point will result in a profit. This...
Break-evenPointAnalysis Break-even Point Analysis Cost VARIABLE COSTS Volume Cost FIXED OVERHEADS Volume 1
break even volume 【经】 够本销售量 break even dollar sales 保本销售额 sales break even chart 【经】 销售(货)保本图 ratio of break even sales to actual sales 【经】 够本销售额对实际销售额比率 break even point 盈亏相抵 break even chart 【经】 损益两平图, 保本图 break even ana...
Contribution margin = (sales price per unit - variable costs per unit) / sales price per unit Examples of break-even point analysis It’s possible to calculate your break-even point in units or sales dollars. Here, we’ll look at both examples: Break-even point analysis in units Let’...
Break-even analysis includes the calculation of the contribution margin, contribution margin ratio, as well as the break-even point in sales units and sales dollars. Often other calculations like the margin of safety or the degree of operating leverage are also...
Graphically Representing the Break-Even Point The graphical representation of unit sales and dollar sales needed to break even is referred to as the break-even chart orcost-volume-profit (CVP)graph. Below is the CVP graph of the example above: ...