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Contents:
Meaning of Break-Even Analysis
Assumptions of Break-Even Analysis
Break Even Point
Types of Break-Even Point
Graphic Method of Break-Even Analysis
Assumptions Underlying Break-Even Charts
Advantages of Break-Even Charts
Limitations of Break-Even Charts
Margin of Safety
Angle of Incidence
Profit-Volume Graph
Curvilinear Break-Even Analysis (Two Break-Even Points)
Meaning of Break-Even Analysis
BEP = FC
SP/U – VC/U FC = fixed cost
SP/U = selling price per unit
= FC VC/U = variable cost per unit
Contribution Margin
Break-even Point in terms of budget-total or money value
Break-even Point as a percentage of estimated capacity
Solution
Types of Break-Even Point
Example
Cash Break Even
Solution