Help please on Break-Even in sales revenue

Anjelika

I'm getting confused please can someone explain to me an easy way to work out the break-even sales revenue. I thought it had something to do with the pv (profit volume) ratio.

Many thanks in advance.

Spring Flower

hi,

break even (in sales revenue) = Total fixed cost
contribution per unit

for instance, mr x sells for £50. it has a variable cost £30 pu. and total fixed cost are £40,000 p.a.

to break even we want just enough contri to cover the total fixed costs of £40,000.

each unit of salse gives contri of 50-30 = £20

.
. . = 40,000
£20
= 2000 units



whereas, p/v ratio = contribution
selling price = £20 X 100
£50

= 40%



and is nothing to do while you calculating berakeven.

visha

look at this thread

http://www.aat.org.uk/forums/showthread.php?t=18157

Anjelika

It really is NO good at all - more help with Break -Even please

Thank you guys for this, but no matter how much I try I keeping failing on this when doing past exam papers :crying:


I don't know what to do now, I've been try for the last four days and still can't get it.

What suggetions apart from never mind that's section 2 of the exam paper that you have failed the exam on, does anyone have?

(I'm doing this all at home with no help from a college!)

renae

did you manage to figure out the break even sales? I went in to see my tutor, she gave me the formula...now it's just a case of memorising it!

BEP: Fixed cost / contribution per unit

contribution: sales revenue - variable cost

Margin of safety = sales - break even point

I am about to test these out as I struggle with this also.....WTS

If anyone has an easier way....PLEASE SHARE