help with break even please

hi guys,

could enyone advise me how to calculate the break even point using sales revenue figure given for the product.

cheers

rob

Comments

  • vvpbl
    vvpbl Registered Posts: 24 Dedicated contributor ? ? ?
    Hello

    As far as I know:

    Sales Revenue-Variable Cost = Contribution
    At Break even point,
    Sales Revenue-Variable Cost = Fixed Cost
    So, Contribution = Fixed Cost

    But
    Contribution = Contribution per sales revenue X Sales revenue

    At Break even point:
    Contribution = Contribution per sales revenue X Break even point sales revenue

    So,
    Contribution per sales revenue X Break even point sales revenue = Fixed cost

    and again

    Profit Volume ratio =( Contribution/ Sales revenue )X 100

    So,

    Break even point sales revenue = Fixed Cost/ PV Ratio



    This is as per my understanding.

    Regards

    Lalita
  • valentino46
    valentino46 Registered Posts: 124 ? ? ?
    hi,

    thanks for the response, i have divided the sales revenue figure by sellling price per unit which has given me the total number of units needed to be sold to make the given revenue figure, then i have deducted the fixed costs from the total sales revenue, and then multiplied the variable cost per unit by the amount units sold to achieve the sales revenue figure!!


    oh dear im lost.

    rob
  • jewels.p
    jewels.p Registered Posts: 1,774
    Dont know if this helps but I use the acronyms quoted on here to try to remember Formulas. Breakeven in Revenue = Fixed Costs/ PV Ratio.

    First of all calculate the PV Ratio by dividing the Contribution by the Sales Price.

    Hope this helps

    Julie
  • valentino46
    valentino46 Registered Posts: 124 ? ? ?
    hi julie,

    i have used your calc and it seems to give the answer of 0. so i presume ive broke even.

    cheers

    rob
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