BREAK-EVEN The break-even point of a new product is the

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BREAK-EVEN
The break-even point of a new product is the
level of production and sales at which costs and
revenues are exactly equal.
It is the point at which revenue exactly covers
costs and there is not a profit or loss.
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COSTS
VARIABLE COSTS
FIXED COSTS

• Overheads, i.e.
• premises costs
• wages
• admin costs

• Raw materials
• Components
• Direct labour

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Break-even formula
Fixed costs
Break-even point
Selling price (per unit) variable cost (per
unit)
Example
166,000
5,443 units

50 - 19.50
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Break-even Chart
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Break-even Graph
Break-even point