This document discusses determining the break-even point for a business. It defines break-even as the point where total revenue equals total costs, making neither a profit nor loss. Two examples are provided to demonstrate how to calculate the break-even point by setting total revenue equal to total costs and solving for the number of units that must be sold. The document also covers computing trade discounts by taking a percentage of the selling price and interest calculations for loans and investments.
2. DETERMINE THE BREAK-EVEN POINT
Break-even is the point of balance making neither a
profit nor a loss (Bacani, et al, 2017).
Any number below the break-even point constitutes a
loss while any number above it shows a profit. It also
happens when the Revenue (R) is equal to Expense (E).
Break-even point is the point when the total revenues
and total cost of expenses are equal Soriano, et al,
2017).
3. DETERMINE THE BREAK-EVEN POINT
Example 1. It costs ₱8 pesos to make one turon. I made 50 pieces and I want to sell them at ₱10
each. How many pieces must I sell in order to reach the break-even point?
E=8 * 50
R=10x
R = E
10x = 8 * 50
10X = 400
10 10
X= 40
4. DETERMINE THE BREAK-EVEN POINT
Jose sells siomai around his neighborhood. He estimates that it will cost
him ₱2.50 to make a piece of siomai. He also plans to buy a cart worth ₱
2,100. If he plans to sell the siomai at ₱4 each, (a)How many pieces must
he sell in order to reach the break-even point? (b)Determine the break-even
point.
E=2.50X + 2,100
R=4X
R=E
4X = 2.50X + 2,100
4X-2.50X = 2,100
1.50X = 2,100
1.50 1.50
X =1,400
E=2.50(1,400) + 2,100
E=3,500 + 2,100
E = 5,600
R=4(1,400)
R=5,600
5. To compute for the TRADE DISCOUNT:
TRADE DISCOUNT =
TRADE DISCOUNT RATE x SELLING
PRICE
P = BR
6. To compute for the TRADE DISCOUNT:
My mother admired a pair of earrings that her friend was offering for ₱24,000, payable in 6 months. She
bargained to be given a discount and her friend agreed to give her 12% if she pays in cash. How much
will my mother have to pay for the pair of earrings?
P = BR
P = 24,000 X .12
P = 2,880
NIP = B – P
NIP = 24,000 – 2,880
NIP = 21,120
7. COMPUTE INTEREST ON MORTGAGE, AMORTIZATION, SERVICES, UTILITIES,
DEPOSITS, AND LOANS.
Example 1.
For 5 years, Mark was able to save ₱350, 000in his savings account. He invested 40% of it in catering a business
with a friend and is earning a monthly income of 2.5%. His earnings from that investment go directly to his
savings. How much will his savings be in two years?
I =
PRT
I
P R T
P = 350,000 X . 40
P = 140,000
R = 2.5% X 12 = 30 % = 0.30
T = 2
I = PRT
I=140,000 X .30 X 2
I = 84,000
F = 350,000 – 140,000
F = 210,000
F =210,000 + 84,000
F=294,000
8. COMPUTE INTEREST ON MORTGAGE, AMORTIZATION, SERVICES, UTILITIES, DEPOSITS, AND LOANS.
Example 2
A loan of ₱173, 000 was repaid after 15 months. If an 8% annual interest was charged, how much was
the repayment check?
I =
PRT
I
P R T
P=173,000
R=.08
T=1.25
YEARS
I=173,000 X .08 X 1.25
I= 17,300
F = P + I
F = 173,000 + 17,300
F = 190,300
T=1.25
YEARS
