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7 Simple Steps to Calculate Your Break Even Point
['Mike Brown']
Small Business Trends
Use the formula: BEP = Fixed Costs ÷ (Selling Price – Variable Costs) to find the break-even point in units.
The formula is straightforward:Break-Even Point (Units) = Fixed Costs ÷ (Selling Price per Unit – Variable Costs per Unit).
You can as well express it as a percentage using the formula: Contribution Margin Percentage = (Contribution Margin / Selling Price) × 100.
To calculate your break-even point, use the formula: Break-Even Point (BEP) = Fixed Costs ÷ (Selling Price per Unit – Variable Costs per Unit).
Here are key steps to reflect upon:Assess Total Fixed Costs: Identify all fixed expenses, such as rent and salaries.