Cost Volume Profit Analysis (CVP): calculating the Break Even Point
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- Опубликовано: 21 июл 2024
- This video illustrates how to calculate the Break Even Point using Cost Volume Profit Analysis (CVP).
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Thank you. You've described in clearly in 10 minutes what took 3 classes at my university.
What university? I'm asking because I'm learning this in college.
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coming here cuz the teacher at my college couldn't make it understandable
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I appreciate this so much! Just understanding the basics or simplicity of the calculations helps so much. Sometimes just reading words on a page can be difficult for me, so seeing an example being explained helps so much! Thank you!
This is absolutely absurd how good u are at explaining this. It takes my university professor like two or 3 1.5hr classes to explain this is the most over complicated confusing way possible when I could just come here and learn it in 5min
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If only I watched this before my test...
Thanks for the explanation.
No problem. Hopefully you can redeem yourself on the final :)
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If you are running a sub shop, do not hire anyone named "jared", or you will never break even!
Needed this laugh before my exam today 😂😂
Very good video, helped me a lot!
Thank you. I found this so helpful!
A brief and informative video! Also, for calculating the break-even point (sales revenue), can’t we just multiply the break-even unit by selling price per unit instead?
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Hence, under which case one should take (BEP) by sales & under which case one should take (BEP) by unit ? As the outcomes are significantly different, I guess there must be some rationale before we select one particular formula, right ?
If you have a decimal for the breakeven point, eg. 81.36, do you round up or down? That is, is it 81? Or 82?
Thanks so much.
So the outcome of the break even point in units. (10000 here) times the price of the product (5 here) is the break even point in sales? Or is it just a coincidence in this example?
great explanation , please add capital budgeting videos also
It was really helpful thanks
sir could you please add more advanced problem on decision making for CVP
huge help . appreciate it
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Thanks!
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Thank you!
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Thank you
Thank you! :)
A big thank you
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There is one thing I don't understand: In my textbook it says that CM Ratio = CM/Total Sales, and in the context of this video it is CM/Selling Price. Is there something I am missing?
i saw online that CM Ratio is either
1) CM ÷ Total Sales
2) CM per unit ÷ Selling price per unit
3) Change of CM ÷ Change of Sales
hoped that helped you 🥰
Another way to find BEP in sales is multiply the BEP in units by the sales price.
재무, 세무회계보다 원가관리를 하려는 이유는 급여, 전표, 납세는 오랫동안 해왔었고 별도로 공부하면서도 알고 있어서 다른 일 하고 싶었다. 원가는 매출원가에 직접 영향을 주고 절감해야하는 원가는 얼마이고 목표이익을 얼마나 거래처와 협의로 가져가느냐에 따라 영업이익도 좌지우지 되므로 중요한 일이라 생각한다. 중요한 일을 하고 싶어서 지원했고 종합원가계산이나 정상개별원가계산 배부법을 어떻게 더 빠르게 풀어나갈지 가치변환방식에 어떤변화를 줘야하는지도 생각하고 있다.
There’s another way to calculate breakeven. Sales price x # units- variable costs x # of units- fix costs= 0. You just fit stuff in and solve the equation.
great stuff
Thanks!
thanks
3차원 공간에는 모든게 원자로 구성되며 주변에있는 물건들도 제조가 되있다면 원가와 이익으로 구성되어 있다
The Breakeven point for sales. FC/(1-(CM/P)). Is that wrong? I'm confused
Racel Kay Quebral I think if you take out the 1 it will be correct. FC/(CM/P)
i thought the contribution margin ratio was (total revenue - variable costs)/ total revenue. In the video you have it as CM per unit / price per unit
In this video, I'm calculating the contribution margin per unit (which is different than the contribution margin). Great question!
you said that breakeven point covers fixed costs. how do you cover variable costs ?
He should have clarified that this formula for break-even points is used to account for variable costs per unit.
If he just needed to cover fixed costs ($20,000), his shop would only need to sell 4,000 subs ($5*4,000=$20,000). The problem with that logic is each sub has an additional expense attached. That is why he needed the contribution margin. Therefore, he subtracted the selling price ($5/sub) from his variable costs per sub ($3/sub) to get his $2/sub contribution margin.
One quick double-check of the numbers is to test that his cost margin (per unit) and cost margin ratio are saying the same thing. Because 10,000 subs at $5 is equal to $50,000 in sales and his cost margin ratio was $50,000, these numbers check out.
For the break-even point in sales $, could you just multiply the break-even point * selling price? or was this just a coincidence on this example?
Yes u can
ye
What the !! Is this what i wasted my time on! You made it very easy!!
Can you help me on a question?
The selling price of a service is $25 per hour. Variable costs of providing the service are $7.00 per hour and fixed costs for the business are $3000.
Calculate how much sale dollars ($) would be required to achieve a profit of $10,000.
Thanks
I think 18055,55556 sales dollars will be needed to achieve the profit of $10,000.
18,055.55556*
x * (25-7)/25 = 3000 + 10, 000 , so x = 17808.2192
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Dear Friends,
I want to confirm:
If a company has passed the break-even point, why should we do variable costs minimums and maximum fixed costs then the profits will increase more?. Thank you.
Thank you!
You're welcome!