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    sweet olive's Avatar
    sweet olive Posts: 1, Reputation: 1
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    #1

    Jun 30, 2007, 03:28 PM
    Break-even EBIT and Leverage
    How to compute the break-even levels of EBIT
    CaptainForest's Avatar
    CaptainForest Posts: 3,645, Reputation: 393
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    #2

    Jun 30, 2007, 04:10 PM
    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
    CaptainForest's Avatar
    CaptainForest Posts: 3,645, Reputation: 393
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    #3

    Jun 30, 2007, 05:09 PM
    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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