Cost

BEP start with 2 important
axes (line). Cost and Output

Output
Watch the movie on BEP Charts at :
http://www.youtub...
Cost

Next, is the COST line. The
most important line is the
Total Fixed Cost (FC) line. You
need to calculate and identif...
Cost

FC line is a straight line.
Why? because how much the
output u made, the FC will
not change =
increase@decrease.

Fi...
Cost

Sample =
Output 1000units : FC RM100
Output 500units : FC RM100
Output 2000units : FC RM100

Fixed Cost

Output

Sun...
Cost

Next is, Total Cost line. (FC +
Variable Cost). The TC line will
move upward because it is a
cumulative cost for eve...
Cost

Next is, Total Cost line. (FC +
Variable Cost). The TC line will
move upward because it is a
cumulative cost for eve...
Cost

As mention before, FC is
static, so why Total Cost is
keeps increasing? The answer
is : The Variable Cost (VC) of
ea...
Cost

Sample =
Output 100units : VC RM100
Output 50units : VC RM25
Output 200units : VC RM200

ost
lC
ota
T

Fixed Cost

O...
Cost

Now, lets see where is FC and
VC located.

ost
lC
ota
T

Fixed Cost

Output

Sunday, December 15, 13
Cost

Now, lets see where is FC and
VC located.

ost
lC
ota
T

Variable Cost

Fixed Cost

Output

Sunday, December 15, 13
Cost

Now, lets see where is FC and
VC located.

ost
lC
ota
T

Variable Cost

Fixed Cost
Fixed Cost

Output

Sunday, Decem...
Cost

Next, Lets draw Sales line. It
is cumulative amount,
therefore the line will always
be uptrend. Start with zero
(0) ...
Cost

Next, Lets draw Sales line. It
is cumulative amount,
therefore the line will always
be uptrend. Start with zero
(0) ...
Cost

We can see three the basic
Now we have all
(3) saleslocate the BEP point.
Line to condition

Then, where is BEP?

es...
Cost

We can see three the basic
Now we have all
(3) saleslocate the BEP point.
Line to condition

Then, where is BEP?
Sal...
Cost

We can see three
(3) sales condition

Sales at
BEP

Sales ABOVE Total Cost

Sales at
PROFIT

es
al
S
ost
lC
ota
T

S...
Sales ABOVE Total Cost

Cost

Sales at
PROFIT
Sales at
BEP

es
al
S
ost
lC
ota
T

Sales at
LOSS
Sales BELOW Total Cost
The...
Now, we can say that the
lower BEP is the better for
the company.
Sales at
BEP

es
al
S
ost
lC
ota
T

Fixed Cost

Sunday, ...
How to lower our BEP? firstly,
we can reduce our FC which
will reduce the Total Cost.

Sales at
BEP

es
al
S

ost
lC
ota
T
...
Or we can increase the sales.
Off coz its need correct
strategies and approaches

es
al
S

ost
lC
ota
T

Sales at
BEP

Fix...
Cost

Thats all from me. Tq for
watching. Pls email to
aku5299@gmail.com for
any info

Sales at
BEP

Sales ABOVE Total Cos...
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Break Even Charts - a simple explanation

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Break even point (BEP) is the most important data to all company. Here is the simple explanation on how to read the BEP chart. From the chart we can plan the BEP easily.

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Break Even Charts - a simple explanation

  1. 1. Cost BEP start with 2 important axes (line). Cost and Output Output Watch the movie on BEP Charts at : http://www.youtube.com/watch?v=B_Nepzytv8c Sunday, December 15, 13
  2. 2. Cost Next, is the COST line. The most important line is the Total Fixed Cost (FC) line. You need to calculate and identify your FC. Pls be precise as u can. Fixed Cost Output Sunday, December 15, 13
  3. 3. Cost FC line is a straight line. Why? because how much the output u made, the FC will not change = increase@decrease. Fixed Cost Output Sunday, December 15, 13
  4. 4. Cost Sample = Output 1000units : FC RM100 Output 500units : FC RM100 Output 2000units : FC RM100 Fixed Cost Output Sunday, December 15, 13
  5. 5. Cost Next is, Total Cost line. (FC + Variable Cost). The TC line will move upward because it is a cumulative cost for every unit of output. Fixed Cost Output Sunday, December 15, 13
  6. 6. Cost Next is, Total Cost line. (FC + Variable Cost). The TC line will move upward because it is a cumulative cost for every unit of output. ost lC ota T Fixed Cost Output Sunday, December 15, 13
  7. 7. Cost As mention before, FC is static, so why Total Cost is keeps increasing? The answer is : The Variable Cost (VC) of each outputs is not static ost lC ota T Fixed Cost Output Sunday, December 15, 13
  8. 8. Cost Sample = Output 100units : VC RM100 Output 50units : VC RM25 Output 200units : VC RM200 ost lC ota T Fixed Cost Output Sunday, December 15, 13
  9. 9. Cost Now, lets see where is FC and VC located. ost lC ota T Fixed Cost Output Sunday, December 15, 13
  10. 10. Cost Now, lets see where is FC and VC located. ost lC ota T Variable Cost Fixed Cost Output Sunday, December 15, 13
  11. 11. Cost Now, lets see where is FC and VC located. ost lC ota T Variable Cost Fixed Cost Fixed Cost Output Sunday, December 15, 13
  12. 12. Cost Next, Lets draw Sales line. It is cumulative amount, therefore the line will always be uptrend. Start with zero (0) value. The degree of sales line will depend on sales ost lC ota T Fixed Cost Output Sunday, December 15, 13
  13. 13. Cost Next, Lets draw Sales line. It is cumulative amount, therefore the line will always be uptrend. Start with zero (0) value. The degree of sales line will depend on sales s le a ost S lC ota T Fixed Cost Output Sunday, December 15, 13
  14. 14. Cost We can see three the basic Now we have all (3) saleslocate the BEP point. Line to condition Then, where is BEP? es al S ost lC ota T Fixed Cost Output Sunday, December 15, 13
  15. 15. Cost We can see three the basic Now we have all (3) saleslocate the BEP point. Line to condition Then, where is BEP? Sales at BEP es al S ost lC ota T The POINT where Sales Line met/cross with Total Cost Line MEANS that TOTAL SALES is Equal to TOTAL COST = NO PROFIT is generated Fixed Cost Output Sunday, December 15, 13
  16. 16. Cost We can see three (3) sales condition Sales at BEP Sales ABOVE Total Cost Sales at PROFIT es al S ost lC ota T Sales at LOSS Sales BELOW Total Cost The POINT where Sales Line met/cross with Total Cost Line MEANS that TOTAL SALES is Equal to TOTAL COST = NO PROFIT is generated Fixed Cost Output Sunday, December 15, 13
  17. 17. Sales ABOVE Total Cost Cost Sales at PROFIT Sales at BEP es al S ost lC ota T Sales at LOSS Sales BELOW Total Cost The POINT where Sales Line met/cross with Total Cost Line MEANS that TOTAL SALES is Equal to TOTAL COST = NO PROFIT is generated Fixed Cost Output Based on the above BEP charts, now u can easily see and verify either your SALEs is good or bad. I believe all businessman want to make profit not vice versa. The minimum sales off coz will be at BEP point. Sunday, December 15, 13
  18. 18. Now, we can say that the lower BEP is the better for the company. Sales at BEP es al S ost lC ota T Fixed Cost Sunday, December 15, 13
  19. 19. How to lower our BEP? firstly, we can reduce our FC which will reduce the Total Cost. Sales at BEP es al S ost lC ota T Fixed Cost Sunday, December 15, 13
  20. 20. Or we can increase the sales. Off coz its need correct strategies and approaches es al S ost lC ota T Sales at BEP Fixed Cost Sunday, December 15, 13
  21. 21. Cost Thats all from me. Tq for watching. Pls email to aku5299@gmail.com for any info Sales at BEP Sales ABOVE Total Cost Sales at PROFIT es al S ost lC ota T Sales at LOSS Sales BELOW Total Cost The POINT where Sales Line met/cross with Total Cost Line MEANS that TOTAL SALES is Equal to TOTAL COST = NO PROFIT is generated Fixed Cost Output Watch the movie on BEP Charts at : http://www.youtube.com/watch?v=B_Nepzytv8c Sunday, December 15, 13

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