Break-Even Point Formula
Also known as: BEP Formula
BEP = \frac{\text{Fixed Costs}}{\text{Price} - \text{Variable Cost per Unit}}
BEP = Fixed Costs / (Price - Variable Cost per Unit)What It Calculates
Determines the number of units a business must sell to cover both fixed and variable costs — the point where total revenue equals total cost.
variables
| Symbol | Name | Description |
|---|---|---|
| BEP | Break-Even Units | Number of units to sell to cover all costs |
Worked Examples
1
BEP = 50000 / (25 - 10)2
BEP = 50000 / 15 = 3,333 unitsResult: 3,333 units
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