How to calculate breakeven point?
Solution:
Break even point is the point where the firm's revenue is equal to firm's cost. At this point the firm neither earns profits nor losses. With the help of break-even analysis, the company or the owner comes to know how many units need to be sold to cover the cost.
Break-even point (in units) = Fixed cost/ Sale Price per unit – Variable cost per unit
Break even point is the point where the firm's revenue is equal to firm's cost. At this point the firm neither earns profits nor losses. With the help of break-even analysis, the company or the owner comes to know how many units need to be sold to cover the cost.
Break-even point (in units) = Fixed cost/ Sale Price per unit – Variable cost per unit