Break-even analysisBREAK EVEN POINT

Break-even analysis predicts when…

… Your business is going to start making profit.

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It can also be used to:

• Evaluate a start-up idea

• Assess the impact of new costs

• Project profitability for a new product

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It can also be used to:

…By separating them into fixed costs (overheads) and variable costs

You need to know your:•Total Fixed Costs•Variable Cost Per Unit

Start with your costs…

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The break-even equation:

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Total fixed costs/Contribution per-unit

= Break Even in units

Company Details1. Shree Ganesh Bricks2. Shree Dutta Kripa Ent.3. Bharucha Concrete Ready Mix

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COMPANY 1 – SHREE GANESH BRICKS

Shree Ganesh Bricks is a small scale company situated in Nande. It has production capacity of around 3000 bricks a day. The bricks they produce are used in pashan,nande,lupin industries etc.

The raw material they use to made bricks are cement pieces, water, fly ash.

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Quantity Produced = 78000 bricks (Per Month) Total Variable Costs= Rs.390000Total Fixed Cost=Rs.30000Total Sales=Rs.624000Total Cost=Rs.420000Contribution=Rs.234000Contribution per-units= Rs.3

BEP(Units) =Total fixed/contribution per

unit=30000/3=

10000 Units

CALCULATIONS-OF BREAK EVEN POINT

BEP(Sales)=BEP(Units)*price per-unit

10000*8=Rs.80000

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COMPANY 2 – BHARUCH CONCRETE READY MIX

Bharuch Concrete Mix is a medium scale company. It is producing around 120 tones of 20mm concrete. Raw material used are 50% cement , 20% fly ash, 10% river sand and 20% Rheoplast. It supply concrete mix in all over Pune.

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Quantity Produced = 3120 tones (Per Month) Total Variable Costs=Rs. 1818960Total Fixed Cost=Rs.100000Total Sales= Rs.2598960Contribution=Rs.780000Contribution per-units=Rs.250

BEP(Units) =Total fixed/contribution p/u=

10000/250= 400 tone

CALCULATIONS-OF BREAK EVEN POINT

BEP(Sales)=BEP(Units)*price per-unit

400*833=Rs.333200

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COMPANY 3 – SHREE DUTTA KRIPA ENT.

Shree Dutta Kripa Ent. is a small scale industry . It manufactures sliding window, sliding doors and do the glass work. It is situated in Pashan. Raw material used are aluminium, steel, rubber PUC, bolt and glass.

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Sales =6000unitsTotal Variable Costs= 60000*130= Rs.780000Total Fixed Cost= Rs.45000 Total sales= 6000*180 Rs. Per sq feet = 1080000 Contribution Margin= 300000Contribution Margin in units= 50

BEP(unit)=fixed cost/contribution p/u

=45000/50900 units

BEP(sales)=BEP(Units)* per-units price

=900*150=162000

CALCULATIONS-OF BREAK EVEN POINT

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Thank You