Jinsi ya kukokotoa Break-Even
Break-Even ni nini?
The break-even point is where total revenue equals total costs — no profit, no loss. Below break-even, the business loses money; above it, every unit sold contributes to profit.
Fomula
Break-even units = Fixed costs / (Selling price − Variable cost per unit)
- Q
- Break-Even Quantity (units)
- F
- Fixed Costs ($)
- P
- Unit Selling Price ($/unit)
Mwongozo wa Hatua kwa Hatua
- 1Contribution Margin = Selling Price − Variable Cost per Unit
- 2Break-Even Units = Fixed Costs ÷ Contribution Margin
- 3Break-Even Revenue = Break-Even Units × Selling Price
- 4Margin of Safety = Actual Sales − Break-Even Sales
Mifano Iliyotatuliwa
Ingizo
$50,000 fixed costs, $25 selling price, $10 variable cost
Matokeo
Contribution = $15; Break-even = 3,333 units; Revenue = $83,325
Maswali yanayoulizwa mara kwa mara
What are fixed costs vs variable costs?
Fixed costs (rent, salaries) don't change with production. Variable costs (materials, shipping) scale with units produced. Contribution margin = Price − Variable cost.
What happens after break-even?
Every unit sold beyond break-even contributes its full contribution margin to profit (before taxes). This is where profitability accelerates.
How do I lower my break-even point?
Reduce fixed costs, raise selling price, or lower variable costs. Even small improvements multiply across all units sold.
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