# Break even point

Esme
Experienced MentorRegistered Posts:

**711**
Hi,

Does anyone have a formula for calculating break even point in terms of sales revenue? The only way I can find in my book is by drawing a graph... which looks a bit complicated!

Thx in advance!

Does anyone have a formula for calculating break even point in terms of sales revenue? The only way I can find in my book is by drawing a graph... which looks a bit complicated!

Thx in advance!

0

## Comments

6,9706,970Management Account Formulas

Contribution Selling price per unit-variable costs per unit

Breakeven in Units Fixed costs/contribution

PV Ratio Contribution/sales price

Breakeven in Revenue Fixed costs/pv ratio

Margin of Safety in Units Forecast-breakeven

Margin of Safety % Margin of safety in units/forecast x 100

Target Profit Fixed costs + target profit/contribution

7111582,034The standards would allow the examiner to present a profit and loss account for a business e.g. a restaurant or pub, and then ask for the breakeven sales revenue.

Restaurants sell a variety of products, so calculating breakeven in terms of units is not useful.

So take 2 steps

but I advise you to keep it as a decimal rather than converting it to a %)This gives the Sales Revenue needed to break even.

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711