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    Breakeven Point - Definition, Examples, and How To Calculate

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    Angela Miles Dizon
    The document defines the breakeven point as the level of production or sales where total revenues and total costs are equal. It explains that in accounting, the breakeven point is calculated by dividing fixed costs by the revenue per unit minus variable costs per unit. The breakeven point in investing occurs when the market price of an asset equals its original cost.

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    Breakeven Point - Definition, Examples, and How To Calculate

    Uploaded by

    Angela Miles Dizon
    102 views1 page
    The document defines the breakeven point as the level of production or sales where total revenues and total costs are equal. It explains that in accounting, the breakeven point is calculated by dividing fixed costs by the revenue per unit minus variable costs per unit. The breakeven point in investing occurs when the market price of an asset equals its original cost.

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    Breakeven Point - Definition, Examples, and How to Calculate

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    The document defines the breakeven point as the level of production or sales where total revenues and total costs are equal. It explains that in accounting, the breakeven point is calculated by dividing fixed costs by the revenue per unit minus variable costs per unit. The breakeven point in investing occurs when the market price of an asset equals its original cost.

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    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    102 views1 page

    Breakeven Point - Definition, Examples, and How To Calculate

    Uploaded by

    Angela Miles Dizon
    The document defines the breakeven point as the level of production or sales where total revenues and total costs are equal. It explains that in accounting, the breakeven point is calculated by dividing fixed costs by the revenue per unit minus variable costs per unit. The breakeven point in investing occurs when the market price of an asset equals its original cost.

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    Breakeven Point: Definition, Examples, and How to Calculate

    What Is the Breakeven Point (BEP)?


    The breakeven point (breakeven price) for a trade or investment is determined by
    comparing the market price of an asset to the original cost; the breakeven point is
    reached when the two prices are equal.

    In corporate accounting, the breakeven point (BEP) formula is determined by dividing the
    total fixed costs associated with production by the revenue per individual unit minus
    the variable costs per unit. In this case, fixed costs refer to those that do not change
    depending upon the number of units sold. Put differently, the breakeven point is the
    production level at which total revenues for a product equal total expenses.

    KEY TAKEAWAYS

     In accounting, the breakeven point is calculated by dividing the fixed costs of


    production by the price per unit minus the variable costs of production.
     The breakeven point is the level of production at which the costs of production
    equal the revenues for a product.
     In investing, the breakeven point is said to be achieved when the market price of an
    asset is the same as its original cost.
     A breakeven analysis can help with finding missing expenses, limiting decisions
    based on emotions, establishing goals, securing funding, and setting appropriate
    prices.

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