Breakeven point:

From Wikicpa

Jump to: navigation, search

The Breakeven point in accounting the point at which the expense and income are equal. An item sold for the breakeven point has not profit or loss.

The point at which the sales of businesses product "breaks even" is equal to its fixed costs divided by its contribution to profit per unit of output, which is illustrated in the following formula:

\mbox{Breakeven Point} = {\mbox{Fixed Costs} \over \mbox{Contribution per Unit Output}}

The break even point is also the point on a chart indicating the time when something has broken even, and is a general term for not having gained or lost something in a process.

The Contribution per Unit can be worked out using

Contribution = Price per Unit - Variable Costs per Unit

Retrieved from "http://www.wikicpa.com/index.php/Breakeven_point:"
Personal tools