The break-even calculator allows you to perform a task crucial to any entrepreneurial endeavor. The goal of a break-even analysis is to let you know how many units of goods you need to sell in order to cover all of your outgoing costs (cost of goods sold and other, fixed costs that are not tied to the quantity of inventory)
The formula as,
The general equation is fixed_costs = per_unit_profit * number_of_units
Let’s expand the profit. It’s comprised of costs and revenue: fixed_costs = (per_unit_revenue – per_unit_costs) * number_of_units
We need to sell number_of_units = fixed_costs / (per_unit_revenue – per_unit_costs)
We need to talk in terms of dollars brought in, so this changes the break-even point formula to: total_revenue = per_unit_revenue * fixed_costs / (per_unit_revenue – per_unit_costs)
let us consuder,
calculate break-even point
you buy for $30 and sell for $50, your gross profit per item is $20(let’s assume you don’t have other per-unit costs).
Fiixed cost $2700 , Office ,rent etc.,
Divide your fixed costs by the profit you make on every unit – $2700 / $20= 135 this is how many units you need to sell
The overall sales figure is easy: 180 * $45 = $8100