ROLCAM
Aug 27, 2009, 06:20 AM
Break even analysis is a special study
that determines the Sales Amount that is the
Sales per piece times the Number of pieces
will equate exactly to the total of the Fixed Costs plus the Cost per piece times the number of pieces.
SALES = Number of pieces TIMES the price.
TOTAL COST = Fixed Costs PLUS Variable Cost per piece times the number of pieces.
Example TOTAL SALES = 1000 pieces times $100 . This would be $100,000.
Total Fixed Cost = $20,000
Total Variable = 1000 pieces times $80.= $80,000.
Total Costs = $100,000
Break Even = Total Sales = Total Cost.