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BEA

Break Even Analysis

TermDefinition
Break-Even Point (BEP) The point at which a business makes neither a profit nor a loss
Revenues The monetary value of goods and services supplied to the customers
Total revenues Selling price per unit times the units of output
Costs The monetary value of resources acquired to produce goods and services
Variable costs They vary directly with changes in output levels
Overhead costs They remain fixed over a range of output levels
Total costs Variable cost per unit times the units of output plus overhead costs
Contribution per unit Selling price minus variable cost per unit
Maximun production capacity The maximum level of output that a business can sustain to make a product or provide a service
BEP formula Fixed costs divided by the contribution per unit
Created by: giorgiocampagna
 

 



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