Break even point formula for units6/19/2023 ![]() ![]() Let us take the example of a widget manufacturing company to illustrate the concept of break-even analysis. of Units to Produce the Desired Profit = 6,000 of Units to Produce the Desired Profit = + 1,000 Number of Units to Produce the Desired Profit = (Desired Profit in Dollars / Sales Price per Unit – Variable Cost per Unit )+ Break Even points of Unit of Units to Produce the Desired Profit is calculated using the formula given below Then, calculate the Number of Units to Produce Desired Profit ![]() Break Even Point in Dollars = 300 * 1000.Then, calculate Break Even Point in Dollarsīreak Even Point in dollars is calculated using the formula given belowīreak Even Point in Dollars = Sales Price per Unit * Break Even points in Units. Break Even Point in Units = 100,000 / 100.Break Even Analysis Formula- Example #5Ī factory wants to study Break Even point and want to generate a profit of $500,000, the total fixed cost of a product is $100,000, the variable cost per unit $200, sales price per unit is $300.īreak Even Point in Units is calculated using the formula given belowīreak Even Point in Units = Fixed Cost / Sales Price per Unit – Variable Cost per Unit Through this, one can compute the profit or loss of the company. The difference between total revenue and the total cost is profit or loss. So, 3000 units are required to produce to get the desired profit.īreak Even point is a point where the total cost of a product or service is equal to total revenue. of Units to Produce the Desired Profit = 3,000 of Units to Produce the Desired Profit = (100,000 / 200) + 2500 Number of Units to Produce the Desired Profit = (Desired Profit in Dollars / Contribution Margin Per Unit )+ Break Even points of Unit ![]() of Units to Produce the Desired Profit is calculated using the formula given below. ![]()
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