In Managerial Accounting, the need to understand Breakeven Point Analysis Formulas

June 19th, 2007 Comments off
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When studying managerial accounting, understanding break even point and formula are quite critical for operating managers as breakeven point are critical for the survival of a business . Below is a quick reference table summarizing all the major breakeven analysis formulas

BREAKEVEN ANALYSIS FORMULAS

Contribution

sales minus marginal(variable) cost

Contribution

fixed cost plus profit

Profit

contribution minus fixed cost

Contribution sales ratio

contribution

sales

Breakeven point (quantity)

Fixed cost

Contribution per unit

Breakeven point-(value)

Sales value x fixed cost

Total contribution

Breakeven point-   ( value)

Fixed cost

Contribution sales ratio

Margin of safety

Sales level minus breakeven point ( quantity)

Margin of safety

Profit

Contribution sales ratio

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Financial Accounting

 
 

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