![]() To calculate your break even point, you can either do this as an average across all of your products, or use our Break Even Analysis Calculator, to work out individual products sales. Your cost of sales is an easier to identify total where your business simply buys in goods, simply for resale. If you manufacture, this would exclude your raw materials and other direct costs associated with making your products. This figure would exclude all those costs directly related to costs of sales. However, a more meaningful fixed costs summary would include the business’s average running costs. Some definitions only include those costs that the business would incur even if it was closed down. ![]() ![]() However, there are differing opinions as to what fixed overheads are for the purpose of break even point. It is where the gross profit generated from a business’s sales, is equal to its fixed overheads. How to calculate a business break even pointĪ business’s break even point is the balance point of neither making a profit nor a loss. Whilst we were in the middle of updating our Increase Profit Software, we discovered that it would be a great idea to also have a free business tool, which analyses a business’s break even point or BEP.īut before I introduce this new free business tool, I thought it best to explain what break even (or break-even) point is.
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