How to explain the break-even point?

How to explain the break-even point?

Definition of break even the break even is the amount of turnover excluding tax to be achieved during a period to be profitablereach a balance, that is to say a result equal to zero (the total of the expenses = the total of the products).

What is the calculation of the volume break-even point?

You must therefore determine the volume break-even point and divide the whole by the unit selling price. Example: If the product costs 5 euros and the threshold is fixed at 20,000 euros, you will have to sell 4000 units in order to reach the profitabilitybe the calculation next: 20 0.

How to calculate the break-even point?

The elements necessary to calculate the break-even point. To calculate the break-even point, it is first necessary to calculate the margin rate on variable cost and the amount of annual fixed charges.

What is break-even point?

The break-even point (also called the break-even point) is the level of turnover for which the company achieves a zero result: the margin on variable cost exactly covers the amount of the fixed charges. This is an important management indicator for the entrepreneur,…

What is the difference between break-even point and break-even point?

The break-even point represents the minimum amount of turnover to achieve to become profitable. It is expressed in volume (turnover) or in quantity (number of units to be sold). While the break-even point designates the moment (in number of days)…

What are the benefits of break-even point?

As we mentioned in the introduction, the break-even point provides a quantified indicator: from X euros of turnover, the company’s expenses are covered: If the break-even point is exceeded, the company makes a profit;