Flashcards in Break Even Deck (5):
1
Break Even
A point in a business venture where the profits/total sales are equal to the costs.
2
What equation is used to calculate Break Even in Units?
Fixed Costs ➗ (sales price per unit - variable costs per unit)
The price per unit minus the variable costs per unit is the definition of the Contribution Margin Per Unit.
3
What equation is used to calculate Amount of Revenue/Sales needed to Break Even?
Sales price per unit X Break Even in units
This will give the total amount of sales in £ needed to achieve Break Even.
4
What is equation is used to calculate the Amount of Sales needed for Chosen Profitability?
(Desired profit in £ ➗ Contribution Margin) + Break Even in Units
This will give the total amount of unit sales needed to achieve a certain level of profitability.
5