Calculation of Break-even Point
The break-even point is calculated using the selling price per unit, variable costs, and fixed costs.
Example:
Particulars | Amount (in ₹) |
|---|---|
Fixed Expense | 2,00,000 |
Variable Expenses | 4/unit |
Selling Price | 24 |
Solution:
Here, Fixed Cost = ₹2,00,000; Variable Expense = ₹4 per unit; and Selling Price = ₹24
Break-even Point = 10,000 units
It means that the company would need to sell 10,000 units of the product to attain break-even.
Contact Us