MONEY!!

Break-Even

Break-Even-Point; The point in time when the predicted revenue exactly equals the estimated total costs.  Fixed costs / Selling price - Variable costs = Break- Even


Fixed Costs

periodic cost that remains more or less unchanged irrespective of the output level or sales revenue, such as depreciation, insurance, interest, rent, salaries,and wages.

Variable Costs

A periodic cost that varies in step with the output or the sales revenue of a company.

Total Costs

Total costs are the variable costs and the fixed costs added together.

Sales Revenue

The amount realized from selling goods or services in the normal operations of a company in a specified period.

What affects BEP?

Fixed costs and number of sales both affect BEP. This is because break-even only happens when a certain amount of products have been sold at a specific price, therefore the business makes its money back.