How can I solve a problem Break Even point in managerial accounting to find favorable and unfavorable in budgeting. Do you have any answer with a formula?

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The break-even point is the point at which the income from sales will cover all costs with no profits.
Break-Even Point Formulas

To determine the break-even point, we should use the following formula: Sales (S) equals Fixed Expenses (FE) plus Variable Expenses (VE).

It is a usual business policy to evaluate expenses as a percentage of sales. We will use this method when determining the break-even point. For example, if the fixed costs are $100,000 and variable expenses equals 50 percent of the sales of a specific store, the break-even point is computed as follows:

S = $100,000 + .05S
-0.5S + S = $100,000
0.5S = $100,000
S = $200,000

To prove the result, we can substitute the figures for the letters in the equation.

At this point, it is easy to see how the break-even analysis can be used to determine the level of sales required to realize a certain amount of net income. The formula used will be Sales (S) equals Fixed Expenses (FE) plus Variable Expenses plus Net Income (I). Using the formula above, we can easily determine the level of sales that will produce a net income of $40,000.

S = $100,000 + .05S + $40,000
-0.5S + S = $100,000 + $40,000
0.5S = $140,000
S = $280,000
Restaurants and fast-food chains will often want to express their their break-even point by the number of portions sold. This is fairly easy to compute. Here, the break-even point is determined by applying the following formula: break-even point (in units) equals Total Fixed Cost divided by (selling price per unit minus variable cost per unit).

If the selling price of a steak is $1.20, the total fixed cost is $30,000, and the variable cost per unit is 80 cents, how many units must be sold to break-even?

If we apply the formula, the break-even point is

30,000
$1.20 - 0.80 = 30,000
0.40 = 75,000 units

Using this formula, we can compare different sale prices. The break-even point for each price will be calculated and an analysis of the results will determine how reasonable they are and which is to be used when forecasting and budgeting.

Another possibility that the break-even point offers is for a study of the relation between the revenue and cost. A chart can be drawn showing the total revenue and cost at different levels of production when selling a hamburger or a drink at a specified price.