This article provides a full proof formula to calculate break even point. BEP can be calculated in a number of ways, depending on the nature of the information available. Let us use the following symbols in our calculation: P: Selling price per unit q: sales volume f: fixed cost me v: per unit variable cost. Now for BEP, Sales = [...]
Break-Even Analysis: Another form of financial analysis is breakeven analysis. It is a technique for finding a point at which a project will cover its costs, or break even. It is often used to make an initial decision on whether to proceed with a project. Breakeven analysis is also a technique of financial control in the sense that further analyses [...]
There are following two methods to obtain break-even point: 1. Mathematical Method 2. Graphical Method. 1. Mathematical Method: Let cost be the common variable in two situations 1 and 2, then cost equations will be; C1 = f1(x)... a function of (x) ...(1) C2 = f2(x)... another function of (x) ...(2) C1 – may be as total cost, annual cost, [...]