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Given that widget has 9 000 in fixed expenses and 60 production costs such as employees you ll need to sell 22 500 worth of product before profits can accumulate.
Sales revenue needed to break even formula. According to the cost accountant last year the total variable costs incurred add up to be 1 300 000 on a sales revenue of 2 000 000. In simple words it can be said that break even sales are the amount earned in the form of revenue by the company that covers all the expenses made by the company for the production of goods. Formula to calculate break even sales. The term break even sales are used to refer to the point in sales where a company does not make any profit or loss.
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 sales formula example 1.
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