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Algebraic method of the break even point
The break even point can be computed by the following method:
a) Units of sales volume .
b) Budget total or in terms of money value.
c) As a percentage of estimates capacity.
a) Break even point in units : as the break even point is the pint of no profits no loss , it is that level of output at which the total contribution equals the total fixed costs.
b) Break even point in terms of budget total or money value :
c) Break even point as a percentage of estimated capacity : break even point can also be computed as a percentage of the estimated sales or capacity by dividing the break even sales by the capacity sales . for example if a firm has an estimated capacity of 100 000 units of products and its break even point is reached at 50 000 units then the break even point is available the breakeven the break even point .
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