Can someone please tell me the different ways to get break even? I researched on the internet and found BE in sales and units but they look like the exact same thing without any differentiation.
Having issues with breakeven equation
Overview of answers
Upvotes
Best answer
Hi Anonymous,
I think this would be easier to answer if you provided the example you were stuck on?
Generally breakeven is just the time when:
revenue = cost
To break this down to what works in most cases:
price*annual volume sold*number of years = initial investment + fixed costs*number of years + variable cost*annual volume sold*number of years
Let me know if this doesn't apply to your example! :)
Kay
Was this answer helpful?
Hi,
Break even is when the volumes you sell allow you to cover your fixed cost.
Litteraly the fixed cost are payed by the margin you generate on each product sold.
Therefore
Break Even Volume = Fixed costs / (Price - variable costs)
Hope this helps
Best
Benjamin
Was this answer helpful?
Hi,
Its:
(Price - VC)*Q - FC = 0
Best!
Was this answer helpful?
Related Cases
Expert case by Antonello
Style:
Topics:
A wealthy client has recently bought an island in the Caribbean. She has engaged us to identify possible uses for her new island.
... (Open whole case)
11.9k
Times solved
Intermediate
Difficulty
Expert case by Francesco
Style:
Topics:
Our client is a BlissOttica, an Eyewear Manufacturer that is looking to reach a 10% increase in profits. How would you help our client?
... (Open whole case)
8.7k
Times solved
Intermediate
Difficulty
Expert case by Gaelle
Style:
Topics:
A restaurant owner is currently setting up a new restaurant and making some basic decisions on how to fit it out. Today he’s deciding on facilities in restrooms for customers to dry their hands. He has 3 options: Paper towels, Roller towels, and Hot Air dryers. What should he consider in his de
... (Open whole case)
100+
Times solved
Intermediate
Difficulty