METHOD
Formula and method
Units=fixed costs/(price−variable cost), rounded up.
Break even point in units and revenue
Find the minimum sales that cover fixed and variable costs.
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Informational calculations. Check assumptions, dates and jurisdiction before making a decision.
Full disclaimerHow do you calculate the break even point?
The break even point is the number of units at which revenue covers the fixed and variable costs of a period. It equals fixed costs divided by the contribution per unit, the price minus the variable cost, rounded up to a whole unit. With fixed costs of BAM 5,000, a variable cost of BAM 30 and a price of BAM 50 you need to sell 250 units, for revenue of BAM 12,500.
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Basic arithmetic or geometry using the formula shown. Uses only your inputs.
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