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Breakeven

Anonymous A asked on Aug 14, 2019 - 2 answers

Hello,

Can you please clarify how you came up with the breakeven number?

Thanks

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Paul
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replied on Aug 14, 2019
Senior Consultant at BCG - 5 years consulting experience|Coached 300+ candidates |Interviewer at BCG | 2nd Session free
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Hi,

breakeven (sales) = Sales it takes to make Profit = 0 (all cost included)

therefore

(Unit Price - Unit Variable cost) X (Breakeven Quantity) = Other (fixed) costs

Therefore

Breakeven quantity = Other fixed costs / (Unit price - unit variable cost)

hope it helps.

Paul

Ivan replied on Aug 14, 2019

Tom Ford is well-known for male fashion; therefore, the number should be low.

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