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Breakeven Analysis

Dive into the world of breakeven analysis using both the Fixed Cost vs. Variable Cost and Questionable Costs approaches. Learn the formulas, calculations, and how to achieve business return goals seamlessly.

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Breakeven Analysis

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  1. Breakeven Analysis

  2. Breakeven Analysis • Formula: Fixed Cost vs Variable Cost Approach • Questionable Costs

  3. Fixed Cost Approach SP = $12 VC = $ 8 FC= $1000 QC= $200 Units = 350 0 = (SP – VC)X – FC – QC 0= ($12 - $8)X - $1000 - $200 0= $4X -$1200 4x = 1200 X = 300 units

  4. Variable Cost Approach • SP=$12 • VC=$ 8 • FC=$1000 • QC=$200 • Units= 350 0 = (SP – VC – QC/unit)X – FC 0 = ($12 - $8 - $200/350)X- $1000 0 = ($4 - $.57)X - $1000 $3.43X = $1000 X = 292 units

  5. Business Return • Desires minimum 10% on project

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