**Break-Even point (sales dollars) = Fixed Costs ÷ Contribution Margin**

How do you calculate break even sales? .

How do you calculate break even sales? .

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Break-even Sales = **Total Fixed Costs / (Contribution Margin)** **Contribution Margin = 1 – (Variable Costs / Revenues)**

Sales and the Break-Even Point Because the break-even point is determined by total cost, **revenues do not directly affect** the break-even point. Sales revenues do, however, determine whether a company actually reaches its break-even point.

Break even sales is **the dollar amount of revenue at which a business earns a profit of zero**. This sales amount exactly covers the underlying fixed expenses of a business, plus all of the variable expenses associated with the sales.

To find out your sales volume, you need **to multiply the number of items you sell per month by the necessary period — a year**, for example. If you sell 300 light bulbs a month, your sales volume would be 3,600. This means that you sell 3,600 bulbs a year.

- Fixed Costs ÷ (Price – Variable Costs) = Breakeven Point in Units.
- $60,000 ÷ ($2.00 – $0.80) = 50,000 units.
- $50,000 ÷ ($2.00-$0.80) = 41,666 units.
- $60,000 ÷ ($2.00-$0.60) = 42,857 units.

- Type the formula = B6/B2+B4 into Cell B1 to calculating the Unit Price,
- Type the formula = B1*B2 into Cell B3 to calculate the revenue,
- Type the formula = B2*B4 into Cell B5 to calculate variable costs.

- Also Read: Try QuickBooks Online Accounting Software.
- The break-even formula in rands can be stated in several ways, but the most common version is:
- Fixed costs ÷ (sales price per unit – variable costs per unit) = R0 profit.
- R500X – R380X – R200,000 = R0 Profit.
- R120X – R200,000 = R0.

The break-even point can be computed as: **total fixed costs divided by the weighted average contribution margin ratio (WACMR)**. For companies that produce more than one product, break-even analysis may be performed for each type of product if fixed costs can be determined separately for each product.

Break-Even Point = **Total Fixed Costs ÷ (Total Sales – Total Variable Costs ÷ Total Sales)**

**Break-even point = fixed costs ÷ contribution margin** If your business has multiple products, use this calculator to determine the break-even point per product.

Total Fixed Cost | $40,000 |
---|---|

÷ Weighted Average CM per Unit | $12.80 |

Break-even Point in Units of Sales Mix | 3,125 |

The break even point is determined by **dividing the total fixed costs by the difference between the sales price per unit and variable costs per unit**. Your total fixed costs include all the expenses to run your business.

This is the magic number of how many units you need to sell in a given period, in this case, a month, in order to break even. To calculate your unit break-even point, **divide your total fixed costs by your sale price minus your variable costs to land at your break-even number**.

In its simplest form, the break-even chart is **a graphical representation of costs at various levels of activity shown on the same chart as the variation of income** (or sales, revenue) with the same variation in activity.

To calculate your break-even (units to sell) before net profit: **Break-even (units) = overhead expenses ÷ (unit selling price − unit cost to produce)**

- Subtract budgeted unit volume from actual unit volume and multiply by the standard contribution margin.
- Do the same for each of the products sold.
- Aggregate this information to arrive at the sales mix variance for the company.

A break-even analysis is a financial calculation that weighs the costs of a new business, service or product against the unit sell price to determine the point at which you will break even. In other words, it **reveals the point at which you will have sold enough units to cover all of your costs**.

Actual sales mix percentage: **the number of actual units sold of a product divided by total units sold of all products**. Budgeted sales mix percentage: the number of budgeted units sold of a product divided by budgeted total units sold of all products. Profit margin per unit (in dollars, not percentage)