# Cost behaviour and break-even analysis

• Created by: josief95
• Created on: 13-12-15 13:37

## 1. Break-even point (BEP):

• Variable Cost / Contribution per unit (Contribution per unit = Variable costs per unit + Sales revenue per unit)
• Fixed cost / Contribution per unit (Contribution per unit = Sales revenue per unit − Variable costs per unit)
• Fixed cost / Contribution per unit (Contribution per unit = Variable costs per unit + Sales revenue per unit)
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## 2. Contribution margin ratio =

• contribution / cost revenue x 100%
• contribution / sales revenue x 100%
• contribution / fixed cost per unit x 100%
• contribution / cost of sales x 100%

## 3. Break-even point (BEP):

• When a company breaks into a bank
• It is the level of (output) at which total cost is equal total revenue.
• When company generates a positive profit that is also an even number

## 4. Semi-Variable Cost or Semi-Fixed Cost

• It is a mixture of fixed and variable cost
• Remain constant (fixed) when changes occur to the volume of activity then changes
• Vary according to the volume of activity

## 5. Relevant cost examples:

• Differential future cost
• Opportunity cost & Historic cost
• Opportunity cost & Differential future cost
• Differential future cost & Historic cost