Cookie and Privacy Settings

This website uses cookies to enable essential functions like the user login and sessions. We also use cookies and third-party tools to improve your surfing experience on preplounge.com. You can choose to activate only essential cookies or all cookies. You can always change your preference in the cookie and privacy settings. This link can also be found in the footer of the site. If you need more information, please visit our privacy policy.

Data processing in the USA: By clicking on "I accept", you also consent, in accordance with article 49 paragraph 1 sentence 1 lit. GDPR, to your data being processed in the USA (by Google LLC, Facebook Inc., LinkedIn Inc., Stripe, Paypal).

Manage settings individually I accept
expert
Expert with best answer

Vlad

97% Recommendation Rate

410 Meetings

11,439 Q&A Upvotes

USD 239 / Coaching

2

How do you find the breakeven point in price?

2 answers

  • Upvotes
  • Date ascending
  • Date descending
Best Answer
Book a coaching with Vlad

97% Recommendation Rate

410 Meetings

11,439 Q&A Upvotes

USD 239 / Coaching

Hi,

BE(0) = (Price - Variable costs)*Qty - Fixed costs

So you need to plug in VC, FC, and quantity of units sold.

Best

Hi,

BE(0) = (Price - Variable costs)*Qty - Fixed costs

So you need to plug in VC, FC, and quantity of units sold.

Best

First, you take the total fixed cost and divide it by the number of units to calculate the required unit margin. Then, you add that required unit margin to the variable cost (per unit cost), which gives you the required price.

However, in case interviews you are more likely to get a question around finding the breakeven quantity rather than the breakeven price.

First, you take the total fixed cost and divide it by the number of units to calculate the required unit margin. Then, you add that required unit margin to the variable cost (per unit cost), which gives you the required price.

However, in case interviews you are more likely to get a question around finding the breakeven quantity rather than the breakeven price.

Related case(s)

Rally racing

Solved 8.8k times
Rally racing Your client is the owner of UBS #42, a rally racing team. There are 36 races in a season. At the end of the season, the driver who has earned the most number of points will win the championship. Jeff Tarin, a well-known driver, races for UBS #42. He began racing in this tournament six years ago and is currently ranked fifth in a field of 40 drivers. The director of marketing at Jazz Sweets recently contacted your client to ask whether your client would like to start a second racing team that Jazz Sweets could sponsor. The director realizes that rally racing is the fastest-growing race sport segment among males aged 18-45.  He has already asked a successful driver from a regional conventional racing circuit to be the new team’s first driver. Your client wants to know whether he should go ahead with this opportunity.
4.2 5 318
| Rating: (4.2 / 5.0) |

Your client is the owner of UBS #42, a rally racing team. There are 36 races in a season. At the end of the season, the driver who has earned the most number of points will win the championship. Jeff Tarin, a well-known driver, races for UBS #42. He began racing in this tournament six years ago and ... Open whole case

Universal TV

Solved 7.8k times
Universal TV Our client is a Canadian TV company, Universal TV. They recently entered the US market in the northeast to expand its market share and capture a large part of the 4 m consumers in a market that has little competition. However, in the past few years, Universal TV has been unable to realize a profit. You are hired to figure out why this is the case and what their next move should be.   
4.4 5 651
| Rating: (4.4 / 5.0)

Our client is a Canadian TV company, Universal TV. They recently entered the US market in the northeast to expand its market share and capture a large part of the 4 m consumers in a market that has little competition. However, in the past few years, Universal TV has been unable to realize a profit. ... Open whole case

Caribbean Island – MBB Final Round

Solved 6.3k times
Caribbean Island – MBB Final Round A wealthy client has recently bought an island in the Caribbean. She has engaged us to identify possible uses for her new island.
4.6 5 335
| Rating: (4.6 / 5.0)

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