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Sales revenue: What is the breakeven point?

Asked 3 years ago

Is there a way to calculate it? If so, what's the formula? Also, what would happen if the sales revenue falls?

Kobe Baker

Saturday, October 30, 2021

Break-Even Point is the point where sales are equal to costs. At this point, the company is neither experiencing losses or profits. To get BEP, take fixed costs ÷ (sales price per unit-variable costs per unit). If sales revenue declines then the company will be below the BEP hence operating at losses.

Dallas Whitaker

Saturday, March 19, 2022

Breakeven point (BEP) refers to the point where your sales revenue is equal to your total expenses. It indicates that you are generating the same profit as your total cost. Hence, not ending up with any loss. If the total profit falls below the breakeven point, it rings the warning bell for your venture - It is time to take action and improvise your business strategies.

To perform breakeven point in units calculation, use this formula:

Breakeven Point (Units) = Fixed Costs / (Sales price per unit – Variable Cost per Unit)

You can also create the same formula to calculate the breakeven point in excel and perform breakeven analysis.

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