Break+Even+point

= The Break Even Point What is the break even point ? - Its an important business objective. - Its exactly covering the total cost bye sales revenue. - It is the point at which your product stops costing you money to produce and sell, and starts to generate a profit for your company. =


 * =**__Break Even Analysis__**= ||  ||

Break even analysis depends on the following variables:
 * 1) The **fixed** production **costs** for a product.
 * 2) The **variable** production **costs** for a product.
 * 3) The product's unit price.
 * 4) The product's expected unit sales [sometimes called projected sales.]


 * Definitions used in Break-Even Analysis:**

> The sum of all costs required to produce the first unit of a product. This amount does not vary as production increases or decreases, until new capital expenditures are needed.
 * **Fixed Cost:**

> Costs that vary directly with the production of one additional unit.
 * **Variable Unit Cost:**

> Number of units of the product projected to be sold over a specific period of time.
 * **Expected Unit Sales:**

> The amount of money charged to the customer for each unit of a product or service.
 * **Unit Price:**

> The product of expected unit sales and variable unit cost. **// > (Expected Unit Sales * Variable Unit Cost ) //**
 * **Total Variable Cost:**

> The sum of the fixed cost and total variable cost for any given level of production. > **//(Fixed Cost + Total Variable Cost )//**
 * ** Total Cost: **

> The product of expected unit sales and unit price. **// > (Expected Unit Sales * Unit Price ) //**
 * ** Total Revenue: **

> The monetary gain (or loss) resulting from revenues after subtracting all associated costs. **//(Total Revenue - Total Costs)//**
 * **Profit (or Loss):**

> Number of units that must be sold in order to produce a profit of zero (but will recover all associated costs). > **//(Break Even = Fixed Cost / (Unit Price - Variable Unit Cost)\//**
 * **Break Even:**
 * //for more indormation [|click here]//**

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 * Business writing

Dear Mr.****Courtland the production departement in Big Star company should produce 1000 units from the product X, in order to break even

As you can see fixed cost=20.000$ variable cost = 5.000 $** Q = FC / (UP - VC) 1000 = 20.000 / ( Up -5.000) unit pricw = Up = 5.020 $** // **// = 1000 * 5.020 - 20.000 + ( 1000 * 5000 ) //** //// **// = Zero //** // **//& this is the brak even point //**
 * **Profit (or Loss):** . **//(Total Revenue - Total Costs) =//**
 * **// ****// (Expected Unit Sales * Unit price) - (Fixed cost + total variable cost ) //**** //**