Break-Even Point Analysis

Read this text on break-even point analysis. It goes through the process of calculating the break-even point for cost analysis under different scenarios. Take notes on each of the following: define the break-even point, differentiate between fixed and variable costs, and write the formulas on how to calculate the break-even point, calculate the contribution margin, calculate the contribution margin ratio, and calculate the margin of safety.

Finding the Break-Even Point

Learning Outcomes

  • Define the break-even point
  • Differentiate between fixed and variable costs
  • Calculate the break-even point
  • Calculate the contribution margin
  • Calculate the contribution margin ratio
  • Calculate the margin of safety