Originally published: 12/08/2022 15:52
Publication number: ELQ-20769-1
View all versions & Certificate
Publication number: ELQ-20769-1
View all versions & Certificate
Breakeven and Performance Analysis
Breakeven and Performance Analysis
by Invexic Official
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Our mission is to be a top professional services firm by adhering to our core values which is integrity, objectivity, professional competence, development and maintenance of technical expertise and coFollow
Description
The formula for break even analysis is as follows:
Break Even Quantity = Fixed Costs / (Sales Price per Unit – Variable Cost Per Unit)
Where:
Fixed Costs are costs that do not change with varying output (e.g., salary, rent, building machinery).
Sales Price per Unit is the selling price (unit selling price) per unit.
Variable Cost per Unit is the variable costs incurred to create a unit.
It is also helpful to note that sales price per unit minus variable cost per unit is the contribution margin per unit. For example, if a book’s selling price is $100 and its variable costs are $5 to make the book, $95 is the contribution margin per unit and contributes to offsetting the fixed costs.The formula for break even analysis is as follows:
Break Even Quantity = Fixed Costs / (Sales Price per Unit – Variable Cost Per Unit)
Where:
Fixed Costs are costs that do not change with varying output (e.g., salary, rent, building machinery).
Sales Price per Unit is the selling price (unit selling price) per unit.
Variable Cost per Unit is the variable costs incurred to create a unit.
It is also helpful to note that sales price per unit minus variable cost per unit is the contribution margin per unit.
The formula for break even analysis is as follows:
Break Even Quantity = Fixed Costs / (Sales Price per Unit – Variable Cost Per Unit)
Where:
Fixed Costs are costs that do not change with varying output (e.g., salary, rent, building machinery).
Sales Price per Unit is the selling price (unit selling price) per unit.
Variable Cost per Unit is the variable costs incurred to create a unit.
It is also helpful to note that sales price per unit minus variable cost per unit is the contribution margin per unit. For example, if a book’s selling price is $100 and its variable costs are $5 to make the book, $95 is the contribution margin per unit and contributes to offsetting the fixed costs.The formula for break even analysis is as follows:
Break Even Quantity = Fixed Costs / (Sales Price per Unit – Variable Cost Per Unit)
Where:
Fixed Costs are costs that do not change with varying output (e.g., salary, rent, building machinery).
Sales Price per Unit is the selling price (unit selling price) per unit.
Variable Cost per Unit is the variable costs incurred to create a unit.
It is also helpful to note that sales price per unit minus variable cost per unit is the contribution margin per unit.
This Best Practice includes
Excel