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Home > Business & Careers > Accounting   »   Break-even EBIT and Leverage

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Old Jun 30, 2007, 03:28 PM
sweet olive
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Break-even EBIT and Leverage
How to compute the break-even levels of EBIT

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Old Jun 30, 2007, 04:10 PM   #2  
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Example:
You Sell your goods for $6 a unit with a Variable Cost of $4. You have fixed costs of $20,000

SP 6x
VC 4x
CM = 2x (6x-4x)
Less: FC 20,000
Net Income (should be 0 for BE calculation)

Therefore,
2x – 20,000 = 0
2x = 20,000
x = 10,000

So you need to sell 10,000 units to break even

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sweet olive disagrees: I am sorry, but I do not understanding any of this. I am taking this course on-line and it is not working out.
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Old Jun 30, 2007, 05:09 PM   #3  
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That’s what I get for trying to be nice eh?

If you don’t understand my explanation, then just ask for clarification, don’t go disagreeing with me.

I am sorry you are having difficulties, but when you ask such a vague question, how and I or anyone else suppose to know what YOUR level of understanding is.
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