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break evene 1 2 - – The point in business where the...

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Community college of Philadelphia Instructor: Doretha Baskerville Lindsay Sample Breakeven Analysis Formula __FC__ FC BE = SP – VC = MU = BEU TUG x SP = TRG TUG x VC = TVCG BER + PPR = TRG __PP__ PP PPU = SP – VC = MU = PPU BEU + PPU = TUG BEU x SP = BER TVCBEU + TVCPPU = TVCG PPU x SP = PPR BEU x SP= BER BEU x VC = TVCBEU PPU x VC = TVCPPU TRG – (TVC + TFC) = ??? 1 Introduction to Breakeven Analysis Breakeven Analysis is a process of calculating and illustrating the number of units that must be sold to reach the point where the revenue flowing into the company is enough to offset its costs for a designated period. It is based on the sale of a certain number of units sold at a given cost and a given selling price. Basic concepts involved : BE = Breakeven
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Unformatted text preview: – The point in business where the revenue equals costs. FC = Fixed Cost – Cost of items that are a business expense though they don’t generate revenue. VC = Variable Cost – The cost of products sold including the associated direct labor expense. SP = Selling Price – The price products are sold to the customer. MU = Mark Up – The amount in money added to the variable cost to determine the selling price. PP = Projected Profit – The projected profit the amount of money the company estimate it will achieve over and above breakeven in a particular period of time. U = Unit – a single measure of a product or service R = Revenue – The cash that flows into the organization 2...
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