Save Rs 499 on a 2-Year Ad-Free CAclubindia Pro Membership. Subscribe Now!

Break-even Point Formula

717 views

Save Share

Join Us Follow Us Add as Source

Mohanraj J

1238 Points Posted on 04 February 2020

Dear Friends,

How do we calculate BEP in P&L?

Fixed Cost / (1-VC%)

is this correct?

Replies (5)

Quick Summary

This discussion clarifies how to calculate the break-even point (BEP) for a business. The correct formula involves dividing fixed costs by the contribution margin ratio. The contribution margin is determined by subtracting variable costs from sales revenue. Participants also requested an Excel template for BEP calculations.

Rama chary Rachakonda

Master in Accounts & high court Advocate

9620 Points Posted on 23 February 2020

Your break-even point is the point at which total revenue equals total costs or expenses. At this point there is no profit or loss - in other words, you 'break even'.