This PPT is very useful to Commerce Students

1. Prof. Dr. Suhas Telang
Break Even Analysis

2. Total Cost
1. Total Cost = Fixed Cost + Variable Cost
2. Total Cost = Sales – Profit
3. Total Cost = Sales - Loss

3. Sales
Contribution
1. Sales = --------------------
P/V Ratio
2. Sales = Variable Cost + Fixed Cost+ Profit
3. Sales = Variable Cost + Fixed Cost - Loss
4. Sales = Variable Cost + Contribution

4. 1. Variable Cost = Total Cost - Fixed Cost
2. Variable Cost = Sales - Contribution
3. Variable Cost = Sales x ( 100 - P/V Ratio )
Variable Cost

5. Fixed Cost
1. Fixed Cost = Total Cost - Variable Cost
2. Fixed Cost = Sales – Variable Cost – Profit
3. Fixed Cost = Contribution - Profit

6. Contribution
1. Contribution = Sales – Variable Cost
2. Contribution = Fixed Cost + Profit
3. Contribution = Fixed Cost - Loss
4. Contribution = Sales x P/V Ratio
5. Contribution = Sales
---------------------
Variable Cost
1- ---------------------
Selling Price

7. Fixed Cost x Sales
1. B.E.P. = ------------------------------------
Sales – Variable Cost
Fixed Cost x Sales
2. B.E.P. = ------------------------------------
Contribution
Fixed Cost x Sales
3. B.E.P. = ------------------------------------
P/V Ratio
Break Even Point (In Rs.) ( B.E. P.)

8. Break Even Point (In Rs.) ( B.E. P.)
B.E.P. = Fixed Cost
------------------------------
Variable Cost
-------------------------------
1- Selling Price

9. B.E.P. (In Unit)
Fixed Cost
1.B.E.P = --------------------------------
Contribution per Unit
Fixed Cost
2. B.E.P. = --------------------------------------------------------------------
Selling Price (per unit) – Variable Cost ( per unit )

10. Profit
1. Profit = Sales – Variable Cost – Fixed Cost
2. Profit = Contribution – Fixed Cost
3. Profit = Sales x P/V Ratio – Fixed Cost
4. Profit = P/V Ratio x M/S Ratio x Sales

11. Margin of Safety (M/S)
1. M/S = Total Sales – B.E.P. Sales
Profit
2. M/S = ---------------------
P/V Ratio
3. M/S = Total Sales – B.E.P. Sales
Ratio ------------------------------------
Total Sales

12. Profit Volume Ratio ( P/V Ratio)
Contribution
1. P/ V Ratio = ---------------- x 100
Sales
Sales – Variable Cost
2. P/V Ratio = ------------------------------ x 100
Sales
Fixed Cost + Profit
3. P/V Ratio = ------------------------------ x 100
Sales

13. Profit Volume Ratio ( P/V Ratio)
Profit
4. P/V Ratio = --------------------------------- x 100
Margin of Safety Ratio
Change in Profit
5. P/V Ratio = -------------------------------- x 100
Change in Sales
Change in Contribution
6. P/V Ratio = ----------------------------------------- x 100
Change in Sales

14. Sales Required to Earn Desired profit
Desired Profit + Fixed Cost
1. Required Sales = ----------------------------------------
(In Rs.) P/V Ratio
Fixed Cost + Profit x Sales
2. Required Sales = --------------------------------------------
(In Unit) Contribution Per Unit

15. Sales in Unit Required to Maintain the
Present Level of Profit
Total Contribution Require
1. Required Sales = -----------------------------------------
Net Contribution per Unit

16. Profit From Particular Sales
Net Profit from
Particular Sales = ( Sales x P/V Ratio) – Fixed Cost