A Single Product Break Even Analysis Example

BEP

$

=

BEP

x

=

Where BEP

$

= Break-even in dollars

BEP

x

= Break-even in units

F = Fixed Costs

V = Variable Costs per Unit

P = Price per Unit (after all discounts)

Example: A Dickie-Dee ice cream cart costs $12,000. Direct labour for the driver amounts to

$1.20 per unit, and “Rocket” treats cost $0.80 per unit to prepare. The selling price of each

“Rocket” treat is $3.50. What is the break even point?

Break-even point in dollars:

BEP

$

=

=

Break-even point in units:

BEP

x

=

A Multiple Product Break-Even Analysis Example

BEP

$

=

Where W

i

= The percent of each product of total sales

Example: The Dickie-Dee cart owner now will sell three types of frozen treats,

“Rockets”, “Zipper-Bars”, and “Cherry Blasters”. Use the information below to calculate

the break even point in dollars.

BEP

$

=

=