Professional Documents
Culture Documents
Breakdown Analysis Solution
Breakdown Analysis Solution
Profit Analysis
Chapter 24
Break-even Analysis
Sales xxx
Less variable expenses xxx
Total contribution margin xxx
Less fixed expenses xxx
Profit xxx
Determining the Break-Even Point
Break-even = Fixed costs
sales volume ($) Contribution margin ratio
Profit=
Sales revenue-variable expenses-fixed expenses
Profit=
Example:
Fixed costs = $1,600,000
Sales = $5,000,000
Sales/unit = $4
Variable cost/unit = $2.4/unit
Construct Break-even chart