Break-Even Sales

Break-Even Sales

The revenue from sales necessary to cover costs and prevent a firm from operating at a loss. The breakeven sales may be relatively stable or may fluctuate, depending on the company or industry. Companies with high breakeven sales points tend to have large fluctuations in earnings from year to year.
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The last two windows have also seen a greater 'balancing of the books' with Solskjaer's reign actually seeing more money come in from transfers than going out, thanks in main to the virtual break-even sales of Steven Caulker and Gary Medel as well as the profits from Mutch's departure to QPR.
$ Original fixed costs excluding depreciation 280,000 Depreciation in 2013 106,875 386,875 The final step is to calculate the break-even sales value in 2013 by dividing the fixed costs by the C/S ratio: $386,875 / 59.6% = $649,119.
So you think your small business is too small to worry about break-even sales?
''We have considerable supplying capacity, but there is an extremely large gap between the break-even sales level and our actual sales figure,'' he added.
It also applied break-even sales analysis to understand per-unit contribution to profitability--essentially, examining how much additional volume would be needed to maintain constant profitability.
The company aims to reach break-even sales of $800,000 this year.
How does a company compute its break-even sales level?
Therefore, if the NPV in Equation (3) is set to zero and the required return is used as a discount rate, adjusted by the projected variance in cash flows, the equation's solution, or "break-even sales" is the minimum required change in sales to justify the advertising expenditure.
(a) Break-Even Sales (Units) = Fixed Costs/Unit Contribution Margin Break-Even Sales (Units) = $50,000 = 25,000 units $2 12.