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  • Break-Even Analysis

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    FAIZAL
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    The document discusses break-even analysis, which is the sales volume at which a company's revenue equals its costs, resulting in neither a profit nor a loss. It defines break-even point as the sales volume where contribution margin equals fixed costs. The document provides a formula for calculating break-even point and illustrates it using an example where the break-even point is 25,000 units.

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    The document discusses break-even analysis, which is the sales volume at which a company's revenue equals its costs, resulting in neither a profit nor a loss. It defines break-even point as the sales volume where contribution margin equals fixed costs. The document provides a formula for calculating break-even point and illustrates it using an example where the break-even point is 25,000 units.

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    12 views9 pages

    Break-Even Analysis

    Uploaded by

    FAIZAL
    The document discusses break-even analysis, which is the sales volume at which a company's revenue equals its costs, resulting in neither a profit nor a loss. It defines break-even point as the sales volume where contribution margin equals fixed costs. The document provides a formula for calculating break-even point and illustrates it using an example where the break-even point is 25,000 units.

    Copyright:

    © All Rights Reserved
    Download as PPTX, PDF, TXT or read online from Scribd
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    of 9

    BREAK-EVEN

    ANALYSIS
    2

    BREAK-EVEN POINT
    The sales volume where neither profit
    nor loss is made.

    The sales volume where Contribution


    Margin equals Fixed Cost.
    3

    BREAK-EVEN POINT GRAPH


    Contribution
    Break-Even Point Margin
    Revenue

    Fixed Cost

    Number of units sold


    4

    BREAK-EVEN POINT GRAPH

    Php 25,000.00 units Php 4.00 per unit


    Revenue

    Php 100,000.00

    Number of units sold


    5

    BREAK-EVEN POINT GRAPH


    BREAK-EVEN POINT
    6

    FORMULA
    • Contribution Margin = Fixed Cost
    • Volume Sold * CM per unit = Fixed Cost
    • Volume Sold = Fixed Cost / CM per unit
    • Volume Sold = Fixed Cost / Price per unit –
    Variable Cost per unit
    BREAK-EVEN POINT
    7

    FORMULA

    • Php 100,000.00 = Php 100,000.00


    • Php 25, 000.00 * Php 4.00 = Php 100,000.00
    • Php 25, 000.00 = Php 100,000.00 / Php 4.00
    • Php 25, 000.00 = Php 100,000.00 / Php 10.00 – Php 6.00
    TAKE ACTION TO IMPROVE!
    8
    9

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    FOR YOUR ATTENTION
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