Breakeven (Point): the level of output at which fixed and variable costs are just covered. Sales beyond this level bring profit.
At any price, there will be a quantity of sales that is just enough to balance the books and above which the business will become profitable. Breakeven analysis indentifies this quantity.
As long as the price is above the cost of variable costs, each sale will make a contribution towards ficed costs or profit.
Unit contribution = selling price - variable costs
Breakeven is when the contribution is equal to the amount of fixed costs.
Breakeven point = fixed costs/contribution per unit
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