Break even point

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Querist : Anonymous

Querist : Anonymous (Querist)

12 November 2013 what is causes of break even point by the angle of sales and the angle of production.

Nikhil Kaushik

Nikhil Kaushik (Expert)
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14 November 2013 break even point is where the sales are able to cover the cost of production. So it is the level wherein Zero profit is achieved. There are no causes of it. Its simple maths that at some level of sales company would stop making losses.

CA Pallav Singhania

CA Pallav Singhania (Expert)
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14 November 2013 In general, the point at which gains equal losses.

Break-even is the point of zero loss or profit. At break-even point, the revenues of the business are equal its total costs and its contribution margin equals its total fixed costs.

px = vx + FC + Profit

Where,
p is the price per unit,
x is the number of units,
v is variable cost per unit and
FC is total fixed cost.

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