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New Member
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Apr 7, 2007, 07:07 PM
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Break-even point
I don't understand this question.
How much will profits increase for every unit sold over the break-even point?
This is all the information we have. I just don't get it.
Any unit sold over the break-even point is an increase. How do you find out how much of an increase?
Thanks in advance for the help. I appreciate it.
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Junior Member
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Apr 7, 2007, 08:29 PM
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Commen sense would be the amount of units sold at the selling price
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New Member
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Apr 7, 2007, 08:57 PM
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Originally Posted by LittleMiss1962
I don't understand this question.
How much will profits increase for every unit sold over the break-even point?
This is all the information we have. I just don't get it.
Any unit sold over the break-even point is an increase. How do you find out how much of an increase?
Thanks in advance for the help. I appreciate it.
Break even point is the point where you don't have profit or loss, so for whatever you sell over it is you profit, the price for what you sold it for is the amount of the profit
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Ultra Member
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Apr 7, 2007, 11:43 PM
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I read your question and my answer differs than the other 2.
Example
Selling Price $100 per unit
Less: Variable Cost $40 per unit
Contribution Margin $60 per unit
Less: Fixed Costs $600,000
Therefore, Contribution Margin – Fixed Costs = Net Income or Net Loss.
In this example, the breakeven point is:
60x = 600,000
x = 10,000
So, for you to make NO profit or loss, but just to break even, you would need to sell 10,000 units.
Now, if you sell 1 more unit, your profit is equal to the contribution margin
You sell if for 100, yet the Variable Cost is 40, leaving you with 60 in profit. The fixed costs have already been attributed to the 10,000.
Therefore, all units sold above the break even point, their profit is equal to the Contribution Margin.
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Junior Member
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Apr 8, 2007, 08:17 AM
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Originally Posted by LittleMiss1962
I don't understand this question.
How much will profits increase for every unit sold over the break-even point?
This is all the information we have. I just don't get it.
Any unit sold over the break-even point is an increase. How do you find out how much of an increase?
Thanks in advance for the help. I appreciate it.
I am so sorry for the way that I sounded, please forgive, I did not mean to demean.
I don't know what I was thinking, and I should have thought about my tone, I apoligize again, have a nice Easter! M.
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New Member
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May 31, 2007, 03:42 PM
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Originally Posted by LittleMiss1962
I don't understand this question.
How much will profits increase for every unit sold over the break-even point?
This is all the information we have. I just don't get it.
Any unit sold over the break-even point is an increase. How do you find out how much of an increase?
Thanks in advance for the help. I appreciate it.
Here is the anwer:
For every unit sold over the break-even point, profit increases by an amount equal to Selling price minus variable cost. In other words the amount of increase in profit for every unit sold over break-even point, is equal to Contribution per unit (Selling price per unit - Variable cost per unit)
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Junior Member
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Jun 1, 2007, 12:02 AM
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I Don't Think You Need Any More Answers.
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New Member
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Jun 1, 2007, 08:20 PM
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Captainforest has best reply
Good example forest
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New Member
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Nov 24, 2012, 07:03 PM
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I love you captain forest... you're the best.
Thank you.
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