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What is the formula for finding break even point

User Chris Lamb
by
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2 Answers

4 votes

Answer:

Fixed Costs ÷ (Price - Variable Costs) = Break-even Point in Units

^.^

- Amanda

User MrCooL
by
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3 votes

Answer:

Q(Price -var cost) = Fixed cost

Explanation:

Break even point is the number of units at which there is no profit or no loss.

i.e. we have total revenue = total cost

Total cost = Fixed cost + variable cost

Total revenue = no of units x price per unit

Thus break even point is the Quantity in units Q where

Q *Price = Fixed cost + var cost per unit *Q

Or Q(Price -var cost) = Fixed cost

User Hassan Ibraheem
by
5.6k points