BREAK EVEN POINT

Oleh
SUGENG WAHYUDI Prof.Dr.H
 Break even Analysis
 Break even analysis (cost-volume-profit
analysis): approach to profit planning that
requires derivation of various relationships
among revenue, fixed costs, and variable
costs in order to determine units of
production or volume of sales at which firm
“breaks even” (where total revenues equal
total of fixed and variable costs)
 Assumptions of Breakeven
Analysis
1. Costs can be reasonably subdivided into
fixed and variable components.
2. Sales = Production
3. Sales prices will not change with changes
in volume.
1. Costs can be reasonably subdivided
into fixed and variable components.
– Fixed costs (i.e. depreciation expenses,
salaries, rental expenses, etc.) and variable
costs (i.e. cost of direct labor and materials
used) can be easily identified in most cases.
– Semivariable expenses can be problematic,
but can nonetheless be separated into fixed
and variable components for analysis
purposes.
2. All cost-volume-profit relationships are
linear.
– Assumption holds so long as analysis is
confined to reasonable range of operations.
– If level of operations are doubled, relationship
may be different.
3. Sales prices will not change with
changes in volume.
– Economic theory states that one would
normally expect price increase to be
accompanied by decrease in sales volume and
vice versa.
– Assumption holds so long as analysis is
confined to reasonable range of prices.
 Margin of safety

 Margin of safety-a measure in which the

budgeted volume of sales is compared with
the volume of sales required to break even
Break even Chart
 BEP

 Penjualan1000 unit a Rp.1000,- =Rp1.000.000,-

 Fixed cost = RP400.000,-
 Variable cost = RP200.000,-
 Perusahaan A merencanakan penjualan
1.000 unit a Rp2.000,- = Rp 2.000.000,-
 Fixed cost sebesar Rp.800.000,- dan
variabel cost sebesar Rp.400.000,-
 Pertanyaan
 1. Tentukan berapa besarnya target
penjualan minimal supaya tidak terjadi
kerugian
 2.Pada penjualan sebesar Rp.1.500.000
tentukan besarnya keuntungan atau
 Sales1000 unit a Rp.1000,-
=Rp1.000.000,-
 Fixed cost = RP400.000,-
 Variable cost = RP200.000,-
 BEP

 Penjualan1000 unit a Rp.10.000,- =Rp10.000.000,-

 Fixed cost = RP4.000.000,-
 Variable cost = RP2.000.000,-
 QUESTION
1.Using the following data, calculate the
breakeven point ( Formula 1)

BEP = FC/ (P – VC)

1.Using the following data, calculate the
breakeven point ( Formula 2)
 break-even point (in terms of Unit Sales
(X)) can be directly computed in terms of
Total Revenue (TR) and Total Costs (TC) as:
 The quantity, , is of interest in its own right,
and is called the Unit Contribution Margin
(C): it is the marginal profit per unit, or
alternatively the portion of each sale that
contributes to Fixed Costs. Thus the break-
even point can be more simply computed as
the point where Total Contribution = Total
Fixed Cost:
 o calculate the break even point in terms of
revenue (aka. currency units, aka. sales
proceeds) instead of Unit Sales (X), the
above calculation can be multiplied by Price,
or, equivalently, the Contribution Margin
Ratio (Unit Contribution Margin over Price)
can be calculated:
 Limitations
 Break-even analysis is only a supply side (i.e. costs only) analysis, as
it tells you nothing about what sales are actually likely to be for the
product at these various prices.
 It assumes that fixed costs (FC) are constant. Although this is true in
the short run, an increase in the scale of production is likely to cause
fixed costs to rise.
 It assumes average variable costs are constant per unit of output, at
least in the range of likely quantities of sales. (i.e. linearity)
 It assumes that the quantity of goods produced is equal to the quantity
of goods sold (i.e., there is no change in the quantity of goods held in
inventory at the beginning of the period and the quantity of goods held
in inventory at the end of the period).
 In multi-product companies, it assumes that the relative proportions of
each product sold and produced are constant (i.e., the sales mix is
constant).