Beruflich Dokumente
Kultur Dokumente
DEVELOPMENT
BREAK EVEN ANALYSIS(BEP) or
COST VOLUME PROFIT
ANALYSIS(CVP)
GROUP MEMBERS
AALAP
AJITH
ASHFAQ
This presentation covers
• Example of Break-Even in terms of number of units
• What it means
• How it is used
• Specific terms to remember
• The break-Even formula
• How to calculate Break-Even
BREAK-EVEN ANALYSIS(B.E.P)
Break Even Analysis means or it refers to that system determining the
level of activity where total cost is equal to total sales(covering all costs
but experiencing no profit or no loss)
USED TO:-
• Calculate the number of units that must be sold to Break-Even
• Calculate amount of sales that must be made in terms of money to
cover all the costs
Terms to Remember
• Selling Price- The price of which you are selling your product
• Variable costs (Costs of Goods Sold)-costs that are directly
incurred in order to make each sale & which vary with output. ie Raw
materials, if you are selling books the cost of printing and paper cost
for each book
• Contribution- The difference between the selling price and
variable cost
• Fixed cost- Cost that do not vary with output. ie Rent, Wages
Break-Even (units)
•
How to Calculate Break-Even
You need to know two vital figures
• Contribution
(sale price-variable cost)
• Fixed cost
Example #1
A business of selling books