Break even analysis

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Break even analysis

  1. 1. BREAK EVEN ANALYSIS
  2. 2. BREAK EVEN ANALYSIS Break-even analysisis a tool to calculate at which salesvolume the variable and fixed costs of producing your product will be recovered.
  3. 3. BREAK EVEN POINT FORMULA Fixed Cost (Unit Price - Variable Unit Cost)
  4. 4. SAMPLE PROBLEMBazaar Bargains information, costs, and prices: Sells cartoon watches that have a cost of Php500.00(variable cost-expense) All unsold watches may be returned to the supplier Booth rental costs Php5,000 for the day (fixed cost- expense) Selling price of the watches is Php1000.00 Use the above information to calculate the number of watches (units) and the sales pesos we need in order for our bazaar business to break even for the day.

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