In Managerial Accounting, the need to understand Breakeven Point Analysis Formulas
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 |
Comments are closed now.