Question

Recompile the break even point in units.

Answer 1

Break-even point analysis is a measurement system that calculates the margin of safety by comparing the amount of revenues or units that must be sold to cover fixed and variable costs associated with making the sales. In other words, it’s a way to calculate when a project will be profitable by equating its total revenues with its total expenses.

The break-even point formula is calculated by dividing the total fixed costs of production by the price per unit less the variable costs to produce the product.

Break-even points in units will give you the number of units selling which the Commany will make no profit no loss i.e. the Contribution made will exactly cover the fixed costs.

Formuale -

Breakeven Points in Units = Fixed Costs / (Sales Price per Unit - Variable Cost per Unit)

Or it can be rephrased also as,

Breakeven Points in Units = Fixed Costs / Contribution Margin per Unit