Break Even Analysis
November 8th, 2022
Finance Example – Break Even Analysis.
The break even point for a business is given by the formula:
B = F/P-V
B = units sold to breakeven point
F = fixed costs
P = price per unit
V = variable costs
Suppose EducateComp knows its fixed costs are $100,000, its variable costs are
$500 per copy of AlgeComp, and they must to sell 15000 copies of AlgeComp to
break even the first year. What is the minimum price per unit they should charge?
B = F /P-V