How to calculare the break even point for quantity and for sales?

Hi there,

To find the quantity to breakeven, you can just rearrange the breakeven formula, which is the following:

R-VC-FC=0

⇔ p*q-c*q-FC=0

Where

• R= Revenues
• VC= Variable Costs
• FC = Fixed Costs
• p = Price
• q = Quantity
• c = Variable Cost per Unit 

To calculate the quantity, you can rearrange as follows:

p*q-c*q-FC=0

⇔ q=FC/(p-c)

Hope this helps,

Francesco

Hi there,

Breakeven is tough as there are so many scenarios! Just remember, all breakeven is, is solving for x, where x is some number to figure out how much of something we need.

The formula you create is specific to the case. So, we may say: We make $20 profit per shoe, and we spent $1,000 to create the shoe stand. How many shoes do we need to breakeven?

In this case, the formula is 1,000 = $20 x ====> x = 50 shoes

Understood? Feel free to message if you'd like to go through multiple examples/scenarios!

Hello!

There are multiple ways, but hte most common one is dividing all costs into the contribution margin. 

For example, imagine you borrow 100 for a coffee machine, and you sell coffees for 1 USD, or which you have costs of 90 cents. 

Contribution margin is 10 cents, and break even would be 100/ 0.1

Hope it helps!

Cheers, 

Clara