Question

How to calculate break even point in terms of sales revenue

Answer 1

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.

Divide the fixed costs by the number of units you expect to sell to find the fixed costs per unit. For example, if you have a rug business that has $40,000 in overhead costs, you would divide $40,000 by 1,000 to get $40. Add the variable costs per unit to the fixed costs per unit to find the break even price.

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