Break Even Revenue Equation

Break even sales is used in order to calculate the total amount of the revenue level at which there is zero amount of the profit to the business and it is calculated by dividing the total fixed expenses of the company by the contribution margin percentage.

Break even revenue equation. Let us take the example of a company that is engaged in the business of lather shoe manufacturing. In other words it s a way to calculate when a project will be profitable by equating its total revenues with its total expenses. Formula to calculate break even point bep the formula for break even point bep is very simple and calculation for the same is done by dividing the total fixed costs of production by the contribution margin per unit of product manufactured. Break even sales formula example 1.

The contribution margin per unit can be calculated by deducting variable costs towards the production of each product from the selling price per unit. The calculation of break even revenue involves dividing the fixed costs by the profit volume ratio or c s ratio. Formula to calculate break even sales.