Calculated by amount: breakeven point = fixed cost /( 1- variable cost/sales revenue) = fixed cost/contribution gross profit margin.
Break-even point (also known as break-even point, break-even point) refers to the business volume (output or sales volume) that an enterprise must reach without winning or losing, and it is a very important quantitative boundary in investment or operation.
Break-even analysis calculates the break-even point by analyzing the relationship among operating income, variable cost, fixed cost and profit.
1. fixed cost: refers to the part of the cost that does not change with the change of output.
The fixed cost of enterprise production and operation mainly includes the depreciation expense of fixed assets.
2. Variable cost: refers to the part of the cost that changes with the increase or decrease of output. The variable costs of enterprise operation and production generally include materials, wages, etc. Variable cost can be expressed as the product of variable cost per unit output and product output.
3. Total cost: the sum of fixed cost and variable cost. The relationship among total cost, fixed cost and variable cost is as follows:
C=F+V=F+v×Q
C stands for total cost, F stands for fixed cost, V stands for variable cost, V stands for variable cost of unit output, and Q stands for product output.
Calculation of breakeven point In general, the total income of an enterprise is equal to the product of unit product price and product output. When breakeven is reached, total revenue equals total cost. There is the following equation:
VQ+F=PQv stands for variable cost of unit output, Q stands for output, F stands for fixed cost, and P stands for sales price of unit product. The following equation is obtained by equation transformation:
The equation q = f/(p–v) is the formula for calculating the output of breakeven point. Where q is the minimum output when maintaining the balance of payments.