Break-even point formula: types and calculation options In practice, to analyze the position of any business, two options for calculating the break-even point are used: in physical and monetary terms. Let’s look at each of them in more detail. In kind The main way to quickly calculate the breakeven point is in physical terms. You can calculate how many kilograms, liters or pieces of goods you need to sell in order to cover all variables, as well as fixed costs.
Let us emphasize that this method is used
Only if you have a single-production. That is, only one nigeria phone number library product or one service. To calculate the break-even point in physical terms, use the algorithm: First, you need to calculate and record all fixed costs when selling goods. Next, calculate all variable costs and divide them by the quantity of products produced to get the variable costs per unit of goods.
Calculate the margin per unit of goods
To do this, subtract the variable costs per unit of goods from the price per unit of goods. Find the TBU using the prepared formula. To understand the logic of headhunting is the most effective way of finding employees applying the formula to calculate the breakeven point, additional data is needed. Let’s look at an example. From the example it is clear that the entrepreneur needs to sell 6 tables for a total of 102,000 rubles to reach the break-even point. In monetary terms.
You sell several different products or services
Then you do not need to calculate the break-even point snbd host separately for each. In such cases, the entire range of goods is equated to conventional units or monetary equivalent. And the break-even point is calculated for each product in total. In this case, the breakeven point calculation is a little more difficult to use. The formula for the calculation will help you understand how much you need to sell in order to cover all variable and fixed costs and make a profit.
To calculate the break-even point in monetary terms
You need to: As before, first calculate the fixed costs. Then calculate the variable costs for the entire volume of manufactured products. Next, you need to calculate the overall margin using the formula: “Revenue” – “Variable Costs”. Find TBU using the formula. This formula can also be shortened and presented as: Break-even point = Fixed costs / Marginality. Let’s look at an example to understand how to find TBU.