Presented By:Rajesh Jangir Manish Kumar Chandan Vianney John Bara

Break even analysis is a method of studying the relationship among sales revenue, variable cost and fixed cost to determine the level of operation of which all the cost are equal to its sales revenue and there is no profit or loss situation.

balancing point or zero profit and loss point. evaluation point.BreakBreak-even Point Break even point is a point where a firm neither earns any profit nor incurs any loss. That is why it is also known as critical point. equilibrium point. .

profit .Š Break even point (of output) = (fixed cost) / (contribution per unit) Where. Contribution=selling cost-variable cost Fixed cost= Contribution.

Costs/Revenue TR TC VC Break-even Point FC Output/Sales .

5.Simple break even chart.Control break even chart.Contribution break even chart.1. . 4. 2.Cash break even chart. 3.Analysis break even chart.

. 5.000 2.The following figure relates to one years working at 100% capacity level in a manufacturing business: Rs Fixed overhead Sales Variable overhead Direct wages Direct materials 60.000 80.000 1.000 .

20.000 1.000 variable overhead 1.Sales Less: variable costs: Rs direct materials 2.000 direct wages 80.00.000 Contribution Rs 5.000 .

00.000 x 100 = 24% sales 5.20.000 x 100 = 50% 5.E.000 P/V Ratio 24% Break-even ratio = break-even Sales x 100 actual Sales = 2.50.000 B.50.000 = Rs 2.000 .00.P/V ratio = contribution x 100 = 1.P = Fixed Cost = 60.


Find out the break-even point from the following Figures by a contribution graph.000 units Rs. Sales volume : Selling price per unit : Variable cost per unit: Fixed cost : 80. 20 Rs. 4.00.000 . 10 Rs.

000 .E.P(units)x selling price per unit = 40. 10 B.000 = 40.P(in Rupees) = B.000 units 10 B.variable cost per unit = Rs.00.20 ² Rs.E.00. 10 = Rs.E.P(in units) = fixed cost contribution per unit = 4.000 x 20 = Rs 8.Contribution per unit = selling price per unit .


Prepare a cash break-even chart from the Following data: Sales : 40.000 Tax : 50% profit Preference dividends : Rs 20. 30. 5 Fixed costs : Requiring immediate cash payment Rs.000 Not requiring cash payment(depreciation) Rs.000 . 80.000 units Rs 10 Variable cost : per unit Rs. 50.000 Rs.


From the following data.000 Fixed costs Rs 36.000 Sales Rs 80.000 units at Rs 10 each) .000 Variable costs Rs 40.000 Sales Rs 1.000 (10.000 units at Rs 8 each) (10.00. draw control break-even Chart: (i) Budgeted figures: (ii) Actual figures: Fixed costs Rs 20.000 Variable costs Rs 40.


00.000 Sales : 10.000 Direct wages : 1.00.000 Present each of the above figures graphically on a breakeven chart and find out break-even point.The following figures relate to one year·s working in a manufacturing business: Rs.000 Variable overheads : 2.10. Fixed overheads : 1. .20.000 Direct materials : 4.50.

Total contribution profit(TCP)=TR-TVC . they use a more appropriate concept known as contribution margin .In short run . where a part of firm·s investment is a sunk investment .



profit volume ratio is also called ¶contribution ratio·. P/V ratio= contribution sales x 100 . It is rate of contribution per product as a percentage of turnover.

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